Payback general terms and conditions partly invalid - several clauses objected to

The Federal Association of Consumer Centres and Consumer Associations has taken legal action as plaintiff against the company "Payback", which operates a customer loyalty and discount system.

The plaintiff essentially sued the defendant (Payback) for injunctive relief against the use of three clauses used by the defendant within its general terms and conditions (GTC) by which consumers can register to participate in the discount programme. The Court of Appeal did not object to the use of the clauses.

The plaintiff's appeal, which was allowed by the court of appeal, was partially successful. In its judgement delivered on 16 July 2008, the VIII Civil Senate of the Federal Court of Justice (BGH), which is responsible, inter alia, for sales law, ruled against a clause used by the defendant. In its judgement, the VIII Civil Senate of the Federal Court of Justice (BGH), which is responsible, inter alia, for sales law, declared a clause used by the defendant, which concerns the consent to the storage and use of data for the sending of advertising by post, e-mail and SMS, invalid insofar as it concerns e-mail and SMS (§ 307 para. 1 sentence 1, para. 2 no. 1 BGB). The Federal Court of Justice did not object to a clause stating that the date of birth was required for participation in the "Payback" programme, as well as to a provision in the form concerning the reporting of discount data for the administration and payment of discounts, because they do not contain any provisions that deviate from legal provisions (section 307 (3) sentence 1 BGB).

The consent clause entitled "Consent to advertising and market research" reads:

"With my signature I agree that the data provided by me above as well as the discount data (goods/services, price, discount amount, place and date of transaction) for advertising directed at me (e.g. information on special offers, discount promotions) by post and by means of any services requested by me (SMS or e-mail newsletter) as well as for market research purposes may be stored and used exclusively by L. Partner GmbH and the partner companies in accordance with No. 2 of the enclosed notes on data protection. ...

â Tick here if consent is not given. ..."

The clause used thus distinguishes between advertising by post, e-mail and SMS.

With regard to the consent to the storage and use of data for sending advertising by post, the provision had to be measured against sections 4(1), 4a(1) of the Federal Data Protection Act (BDSG), which set out specific requirements for the permissibility of data collection, processing and use. The Federal Supreme Court ruled that the consent clause was not objectionable from this point of view. In particular, it does not follow from Section 4a BDSG that consent should only be effective if it is "actively" declared in such a way that the consumer must sign a separate declaration of consent or tick a box to be provided for the granting of consent ("opt-in" declaration). Rather, it follows from Section 4a (1) sentence 4 BDSG,* that consent may also be given in writing together with other declarations, provided it is specifically highlighted - as it is here.

On the other hand, the consent clause used here is invalid insofar as it refers to the consent to the use of data for advertising by e-mail or SMS sought by the defendant. In this respect, the Unfair Competition Act (UWG) also intervenes. Pursuant to Sec. 7 para. 2 no. 3 UWG**, advertising using electronic mail (e-mail and SMS), among other things, constitutes unreasonable harassment if the addressee has not given his consent. The VIII. Civil Senate of the Federal Court of Justice - in agreement with the I. Civil Senate of the Federal Court of Justice, which is responsible for legal disputes on claims arising from the Unfair Competition Act. Civil Senate of the Federal Court of Justice - ruled that consent clauses which are designed in such a way that the customer must take action and tick a box if he does not want to give his consent to the sending of advertising using electronic mail ("opt-out" declaration) are not compatible with this provision. § Section 7(2)(3) UWG requires that consent be given by means of a separate declaration ("opt-in" declaration). The requirement of a separate declaration results from the EC Directive on Privacy and Electronic Communications (2002/58/EC), which the German legislator intended to implement with the provision of Section 7 UWG. According to this Directive, consent may be given in any appropriate manner by which the user's wish is expressed in a "specific indication". This wording makes it clear that a separate declaration of consent by the data subject is required, relating only to consent to the sending of advertising by electronic mail. Such a declaration is not already to be seen in the signature with which the customer accepts the contract offer aimed at granting a discount.

The registration form used by the defendant does not provide for a separate declaration of consent. The consumer can enter his email address or mobile phone number in the form. However, according to the design of the form, the consumer only consents to receive electronic information about "extra points opportunities, top promotions and news about Payback ...", but not to receive advertising of any kind by electronic mail.

The second clause, however, challenged by the plaintiff without success, provides:

"If you participate in the Payback programme, ... your date of birth ... is required. ..."

The Federal Court of Justice ruled that this provision is not subject to content review pursuant to section 307 (3) sentence 1 BGB. The provision of the date of birth serves the purpose of the defendant's contract with the consumer (§ 28 para. 1 sentence 1 no. 1 alt. 1 BDSG).*** Already in view of the large number of participants in the Payback programme, a practicable and at the same time secure method of identifying the programme participants is part of the contractual purposes. In a bonus programme which, according to the findings of the Court of Appeal, has around thirty million participants, the provision of the full date of birth is particularly suitable for avoiding confusion of identity.

The third clause, which was the subject of the appeal proceedings, reads:

"If you use your Payback Card with a partner company, the partner company will report the discount data (goods/services ...) to L. Partner for crediting, settlement vis-à-vis the partner companies, administration and payment of the discounts."

The Federal Court of Justice confirmed the opinion of the Court of Appeal that this provision of the form is also not subject to the content review (Section 307 (3) sentence 1 BGB). The communication of the discount data by the partner company also serves the purpose of the contractual relationship of the defendant with the participants of the discount system (§ 28 para. 1 sentence 1 no. 1 alt. 1 BDSG), also insofar as it concerns a communication of the goods and services purchased by the participants using the Payback card. The partner companies affiliated to the bonus scheme can make use of a variety of different discounting options, which may depend specifically on the respective goods or services. In view of this, the defendant needs to know the goods purchased or services used by the customer from the partner company in order to be able to provide the customer with complete, correct, comprehensible and verifiable information about their points balance.



* Section 4a (1) sentence 4 BDSG reads: "If consent is to be given in writing together with other declarations, it shall be specifically highlighted."

** Section 7 (2) No. 3 UWG provides: "Unreasonable harassment shall be assumed in particular in the case of advertising using automatic calling machines, fax machines or electronic mail without the consent of the addressees."

*** Section 28 (1) sentence 1 no. 1 BDSG states: "The collection, storage, alteration or transmission of personal data or their use as a means for the fulfilment of one's own



Federal Court of Justice (BGH) - Judgment of 16 July 2008 - VIII ZR 348/06; LG München I - Judgment of 9 March 2006 - 12 O 12679/05; OLG München - Judgment of 28 September 2006 - 29 U 2769/06


Source: Press release No. 135/2008 of the Press Office of the Federal Supreme Court of 16 July 2008, Herrenstr. 45 a, 76133 Karlsruhe, Tel. 0721-159-5013, Fax. 0721-159-5501, E-mail


Goldberg Attorneys at Law

Attorney at Law Michael Ullrich, LL.M. (Information Law)