The Higher Regional Court of Frankfurt am Main (OLG Frankfurt a.M.), in its decision dated March 21, 2007, file reference: 11 O 65/05, ruled on the conditions under which a seller on the eBay internet platform is to be classified as an entrepreneur.
This classification as an entrepreneur is highly significant, as the disclosure and information obligations for sales via the eBay trading platform apply exclusively to entrepreneurs. Furthermore, an entrepreneur cannot agree to an exclusion of warranty rights. In contrast, for private sales, it is generally possible to completely exclude warranty rights. The classification of a seller as an entrepreneur therefore has far-reaching consequences.
According to Section 14 of the German Civil Code (BGB), an entrepreneur is a natural or legal person or a partnership with legal capacity who, when concluding a legal transaction, acts in the exercise of their commercial or professional activity. A commercial activity requires a planned, long-term, independent, and economic activity that is outwardly apparent (Federal Court of Justice (BGH), judgment of March 29, 2006, file reference VIII ZR 173/05). This also includes part-time activities (1). The intention to make a profit and the scope of the activity are not decisive factors here. Rather, any conduct that can in any way be substantively attributed to entrepreneurial activity is sufficient. (2)
The Regional Court of Mainz stated in its judgment of July 6, 2005, file reference 3 O 184/04 (not yet legally binding), that the regular offering of goods via an internet platform does not necessarily indicate a permanent, systematic course of action within the meaning of Section 14 BGB. According to the Regional Court of Mainz, it is common, especially among younger demographics, to conduct private transactions via the internet. However, the Regional Court of Mainz established several criteria that suggest a seller's entrepreneurial status on eBay.
According to the Regional Court of Mainz, the following points are sufficient as prima facie evidence for a seller's entrepreneurial status:
1. a high number of sales with a high total value in a relatively short period of time (in the case of the Regional Court of Mainz, there were 252 registrations in a period of 2 years and 7 months).
2. the voluntary registration at eBay as PowerSeller.
3. a high number of ratings.
It is therefore interesting what function the Chamber of the Regional Court of Mainz attributes to the PowerSeller status. The Regional Court of Mainz was of the opinion that eligibility as a PowerSeller indicates a commercial activity, and that a seller may only designate themselves as a PowerSeller if they continuously sell a particularly large number of items and can demonstrate a 'high' trading volume. Additionally, PowerSellers must receive at least 100 feedback points, of which at least 98% must be positive. Furthermore, participation in the PowerSeller program is voluntary and can be terminated at any time.
The Regional Court of Mainz therefore held the view that anyone who voluntarily registers as a PowerSeller is, based on common experience, likely also an entrepreneur.
However, a seller registered as a PowerSeller has the opportunity to rebut the prima facie evidence of entrepreneurial status. They must demonstrate this by means of a detailed list of the transactions made. Furthermore, they must demonstrate through this detailed list that the sales exclusively or predominantly involved items for personal use. A mere indication that a seller has neither registered a business nor is listed as liable for VAT with the competent tax office is insufficient in this regard. The Regional Court of Mainz justified this legal opinion by stating that it is solely up to the seller whether or not to register with the authorities. Therefore, a conclusion regarding entrepreneurial status cannot be drawn solely from a lack of business registration.
The Higher Regional Court of Frankfurt am Main has now also concurred with this view of the Regional Court of Mainz in its decision of March 21, 2007, file reference: 11 O 65/06.
The OLG Frankfurt a.M. stated that sales activity via eBay's electronic trading platform is regularly to be classified as commercial if the provider is registered as a 'PowerSeller'.
The Higher Regional Court of Frankfurt also emphasized that registration as a 'PowerSeller' is voluntary. However, the Higher Regional Court of Frankfurt clarified that a seller's classification as an entrepreneur could also arise from other circumstances.
The question of whether a seller's classification as a PowerSeller on the eBay internet platform indicates that this designated PowerSeller is also an entrepreneur within the meaning of Section 14 BGB has not yet been uniformly decided. However, courts are increasingly ruling in line with the decisions presented here from the Regional Court of Mainz, judgment of July 6, 2005, file reference 3 O 184/04, and the Higher Regional Court of Frankfurt am Main, decision of March 21, 2007, file reference 11 O 65/06. It therefore remains to be seen whether a consistent legal precedent will now develop.
Any seller registered as a PowerSeller on eBay or other auction platforms is strongly advised to duly comply with the prescribed disclosure and information obligations. Failure to do so risks numerous legal disadvantages and costly warning letters from competitors.
Naturally, for further information and advice, you can also contact us via email at info@goldberg.de .
Attorney at Law Michael Ullrich, LL.M.
(Information Law)
(1) cf. Palandt/Heinrichs § 14 BGB Rdnr. 1.
(2) cf. Bamberger/Roth, BGB, § 14 BGB Rdnr. 6
