We want and need to draw your attention to a current development, as the changed legal situation requires your action:
On 11 May 2005, the European Parliament and the Council of the European Union adopted Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No. 2006/2004 of the European Parliament and of the Council (Unfair Commercial Practices Directive), in short "Unfair Commercial Practices Directive". The contracting states of the European Union, including the Federal Republic of Germany, have undertaken in this Directive to adopt and publish the necessary legal and administrative provisions required to comply with this Directive by 12 June 2007. The Federal Government of the Federal Republic of Germany - the Federal Ministry of Justice - has "forgotten" to implement this Directive, despite written reminders from the Commission of the European Union.
According to Article 19 of Directive 2005/29/EC, the Directive has thus been directly applicable to the German economic area without national transposition since 12 December 2007.
The Federal Ministry of Justice (BMJ) has so far not progressed beyond an "attempt at a draft for the implementation of the Directive". According to the Directive, a complete revision of the Unfair Competition Act (UWG) is necessary. So far, however, only a draft bill of the "new UWG" is available from the BMJ. Until the enactment of a "new UCA" that fully implements Directive 2005/29/EC, the EU Directive is therefore directly applicable. In the following, we would like to briefly explain some of the essential provisions of this directive and in particular its annexes.
The EU Directive is based on a comprehensive concept of consumer and consumer protection that has so far been foreign to most German companies, and Article 7 of the Regulation makes "misleading omissions" subject to sanctions.
Article 5 of the Directive regulates the fundamental prohibition of unfair commercial practices, including the main features of unfair advertising. Especially advertising in sales, the initiation of sales and also contractual regulations are regulated to a large extent by this directive. According to Article 6, false statements are considered misleading.
Because of Article 6(1)(b) and (c), special care must be taken in future with advertising measures and the formulation of contractual terms and conditions and contracts.
According to Article 7 of the Regulation, "misleading omissions" are now subject to sanctions. This means that incomplete information in contracts, service descriptions and in advertising can very quickly lead to an infringement of competition.
In the future, advertising measures of any kind, including contract execution and general terms and conditions, must be reviewed even more intensively as early as the initial planning phase and corrected if necessary.
However, the most important regulations for the entrepreneur are contained - somewhat hidden - in Annex 1 of the Directive. There, 31 headings and corresponding subheadings list business practices that are considered unfair under all circumstances, i.e. in any case and without restriction. There will probably be no immateriality and no de minimis limit here.
Much has not been legally clarified.
However, major problems arise with some previously unchallenged formulations in general terms and conditions and in advertising.
Item 10 of Appendix 1 is particularly problematic, namely the advertising or even the inclusion of legally granted rights as a special feature of the offer.
In the case of promotions with prize and gambling accompaniment, the new directive is to be examined and observed particularly intensively. The same applies to information on market conditions or the possibility to locate products.
If you are planning advertising measures for products for children or if you create, market, distribute or otherwise place on the market such products which are also intended to be available to children, item 28 of Annex 1 of the Ordinance is of particular importance.
If the advertising measures, product packaging or representations are associated with a direct invitation to children to buy the advertised products or to persuade their parents or other adults to buy the advertised products for them, this is considered to be fully anti-competitive.
This is to be observed not only by the producers and sales organisations, but also by all companies in media marketing and media consulting.
In an initial expert discussion in which the undersigned was able to participate in December 2007, it already became apparent that some presiding senates at the higher regional courts will interpret these provisions to the detriment of advertisers and producers. The opinion of the 1st Civil Senate of the Federal Supreme Court has not yet been conclusively formed. The tendency so far still gives hope for a business-friendly interpretation. However, it will be years before the Federal Supreme Court has to decide these questions. However, action must clearly be taken now.
Of course, in the event of a breach of the Directive, the competitor, but also in particular consumer protection associations, warning associations and similar organisations, have the possibility of issuing warnings with costs. This is likely to increase in epidemic form in advertising measures and also in formulations in general terms and conditions. It has not yet been clarified whether the Directive only covers addressing consumers or, due to the lack of national regulation, also business-to-business ("B2B") transactions and business practices. Unfortunately, there is currently no legal certainty on this point.
We therefore advise you to have all advertising measures, in particular those directed at children, combined with prize competitions or other promotions, as well as the current general terms and conditions reviewed without delay, especially if they were created or reviewed before August 2007.
Goldberg Attorneys at Law have therefore decided, in order to minimise the burden on entrepreneurs, to offer the review of general terms and conditions for their preliminary suitability with regard to Directive 2005/29/EC and its annexes on a flat-rate basis.
If you are interested and have any questions on this topic, please do not hesitate to contact Goldberg Attorneys at Law.
© Goldberg Attorneys at Law, Wuppertal-Solingen 2008
Attorney at Law Alexander Goldberg
Specialist attorney for intellectual property law
Specialist attorney for information technology law (IT law)
a.goldberg@goldberg.de
