The Bonn Regional Court has ruled that the delayed or non-disclosure of annual financial statements by competitors can be subject to a warning notice.
According to Section 325 of the German Commercial Code (HGB), the legal representatives of capital companies must publish the adopted or approved annual financial statements for the company in the Federal Gazette no later than one year after the balance sheet date of the financial year. The defendant in the preliminary injunction proceedings failed to comply with this obligation in the case to be decided.
The Bonn Regional Court stated the following:
“The provisions of Sections 325 et seq. of the German Commercial Code (HGB) constitute market conduct regulations within the meaning of Section 3a of the German Act Against Unfair Competition (UWG).
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The purpose of disclosure under Sections 325 et seq. of the HGB is, on the one hand, the functional protection of the market and, on the other hand, the individual protection of market participants; disclosure or publicity forms the correlate of market participation (Merkt, in: Baumbach/Hopt, HGB, 36th ed. 2014, § 325 marginal no. 1). The disclosure obligations serve, in particular, to protect creditors and other participants in economic life, who thus gain insight into the financial circumstances (Higher Regional Court Cologne of 08.03.1991, 2 Wx 1/91, NJW-RR 1992, 486). The regulations in Sections 325 et seq. HGB therefore also have a protective function under competition law. This interpretation is confirmed by the legislative materials for the Capital Companies and Co-Directive Act (KapCoRiLiG) from 1999. For instance, the letter from the Federal Ministry of Justice (BMJ) dated 30.03.1999 (3507/20 – 320546/99, available at http:// www.gmbhr.de/frueher/09_99/rechnung.htm) assumes that in the event of a violation of the disclosure obligation, a lawsuit under the UWG is possible (see also the reasoning for the draft law attached to this letter, concerning Art. 1, No. 12 – § 335 HGB, available at http:// www.gmbhr.de/frueher/09_99/entwurf.htm). Last but not least, this interpretation is also mandated by EU law (see the so-called Daihatsu decision of the ECJ of 04.12.1997, C-97/96, Coll. 1997, I-6843, cited according to juris [Ls. 1, marginal no. 18 et seq.], as well as the fourth recital of the First Directive 68/151/EEC of 09.03.1968, OJ No. L 65, 8, and the third recital of the Fourth Directive 78/660/EEC of 25.07.1978, OJ No. L 222, 11).
In light of the foregoing, the Chamber does not adhere to the divergent legal opinion expressed during the oral hearing on July 27, 2016, but rather affirms the character of Sections 325 et seq. of the HGB as market conduct regulations within the meaning of Section 3a of the UWG.
“The suitability for noticeably impairing the interests of market participants is evidenced by the violation of market conduct regulations inherent in the non-fulfillment of the disclosure obligation (Köhler/Bornkamm, UWG, 34th ed. 2016, § 3a marginal no. 1.112).”
The Bonn Regional Court therefore ordered the defendant in the preliminary injunction proceedings to
“cease and desist from failing to comply with its disclosure obligation in the electronic Federal Gazette by not publishing the legally prescribed information within the meaning of Section 325 (1) HGB there, or, if the legal requirements apply to it, see Section 326 (2) HGB, by not depositing it there”.
Previously, violations of commercial law disclosure obligations only incurred fines. Now, competitors also have the option to take action against their rivals and competitors under competition law for such infringements. Therefore, managing directors, in particular, should ensure in the future that their companies disclose their respective annual financial statements in a timely manner. Otherwise, in addition to fines, they face competition law warning letters from competitors.
Source: Bonn Regional Court, Judgment of august 31, 2016, File reference 1 O 205/16
Goldberg Attorneys at Law 2016
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Attorney for Information Technology Law
Email: info@goldberg.de
