On 25 November 2008, the German Bundestag passed the Act Amending the Unfair Competition Act (Bundestagsdrucksache 16/11107016). The Bundesrat passed a resolution on the Act on 19 December 2008. It was published in the Federal Law Gazette on 29 December 2008 and entered into force on 1 January 2009 without transitional provisions. The new law implements the Unfair Commercial Practices Directive (UCP Directive) in Germany.
There are a number of significant innovations for all areas of competition law.
First of all, the term "act of competition " will be replaced by the term " commercial act ". The definition of "commercial act" covers "any conduct by a person for the benefit of his own or another person 's business, before, during or after the conclusion of a transaction , which is objectively connected with the promotion of the sale or purchase of goods or services or with the conclusion or performance of a contract for goods or services" . Real estate is also considered to be goods, and rights and obligations are also considered to be services.
In contrast to the previous legal situation, this means that not only activities in the run-up to the conclusion of a contract are covered by the provisions of the UWG, but also the conclusion of the contract itself, the execution of the contract and the rights of the parties concerned in the enforcement of post-contractual rights.
In Section 3 UWG 2009 of the new version, all unfair commercial acts are classified as unlawful if they are capable of noticeably impairing the interests of competitors, consumers or other market participants.
According to Section 3 (3) UWG 2009, all commercial acts towards consumers listed in the Annex to the UWG 2009 are always unlawful.
The annex to the law lists 30 offences that are generally prohibited even without "noticeable impairment".
This so-called "black list" means an almost absolute ban for a considerable number of previously permissible or "imperceptible" petty cases.Of particular importance for daily practice are numbers 5, 6 ,7 ,8 ,11 ,13 ,18 ,21 ,27 and 28 of the "black list", the annex to Section 3 UWG 2009.
Particular care is required in the planning, preparation, dissemination and placement of advertising of any kind, especially advertising aimed directly at children.
Another significant innovation of the UWG is regulated in Section 5a UWG 2009 "Misleading by omission".
In future, the violation of essential information duties may constitute a misleading omission according to this new provision. Previously, traders already had to fulfil a number of information duties when offering goods and services.
The new labelling requirements include:
- the essential characteristics of the product,
- the identity and address of the trader,
- the final price (or a simple calculation method) and any additional costs,
- Terms of payment, delivery and service
Originally, the regulations of the UCP Directive only concern the area between businesses and consumers. According to the European Directive, no explicit provision has been made for the relationship between entrepreneurs. As in other cases, the German legislator goes beyond the directive.
In the new UWG 2009, the term "commercial act" - the starting point for the application of the UWG - is not limited to the relationship between entrepreneurs and consumers.
The definition of the term in Sec. 2 No. 1 UWG 2009 and the description of the scope of application in Sec. 3 UWG 2009 do not contain any restrictions. It follows from this that, according to the intention of the German legislator, these provisions should also apply between entrepreneurs. Since no differentiation has been made in Sec. 4 No. 11 UWG 2009, the following significant innovation arises for practice:
§ Section 4 number 11 UWG 2009 reads: "unfair acts in particular who ...
infringes a statutory provision which is also intended to regulate market conduct in the interest of market participants".
With these legal norms, regulations in general terms and conditions are also directly covered by the UWG for the first time. Previously, case law was inconsistent and only referred to general terms and conditions between entrepreneurs and consumers, but not to general terms and conditions between entrepreneurs themselves. This means that with the new UWG, Sections 307-309 of the German Civil Code (BGB) may be regarded as market conduct rules within the meaning of the UWG. The provisions of §§ 307 ff. BGB thus generally serve to protect other market participants. The AGB provisions of the BGB are intended to protect the contractual partners of the user. It follows that the use of invalid general terms and conditions will in future be classified as an unfair commercial act without further ado.
Whether the use of invalid GTC clauses has an impact on demand decisions is irrelevant. It is more than questionable whether this relatively clear regulation continues the previous case law, which distinguished between consumer and business terms and conditions.
In any case, Section 4(11) UWG 2009 means that entrepreneurs who use invalid general terms and conditions vis-à-vis consumers can generally no longer argue that the so-called minor clause applies in their favour.
Even if the application of the UWG 2009 to general terms and conditions between entrepreneurs will still have to be clarified by case law, it remains to be noted that the use of invalid general terms and conditions in the commercial sector (B2B) can also be an unfair commercial act pursuant to section 4 number 11 UWG 2009 in conjunction with section 3 UWG 2009.
As a result of the new regulation of the UWG, every entrepreneur can only be strongly advised to review all general terms and conditions (terms and conditions of sale, terms and conditions of delivery, terms and conditions of purchase, warranty and guarantee conditions, etc.) in every area of his business and to adapt them to the changed legal situation.
A random check of general terms and conditions currently available on the internet for any industry showed a violation rate against the new regulations of the UWG 2009 of almost 100 % within a few minutes.
Since, according to the bill, the new law came into force "the day after its promulgation", i.e. without a transitional period, quick action by entrepreneurs is required.
A considerable number of new types of warning letters are to be expected, combined with considerable costs for the companies.
At the end of this text you will find for download the non-official but complete text version of the UWG 2009 including the annex to § 3 ("black list") based on the previous wording, incorporating the version passed by the Bundestag after consultation by the Legal Committee, which was the basis for the resolution by the Bundesrat on 19 December 2008. No further changes were made by the legislator.
The version we already provided in advance in December 2008 contains the complete text of the law. The version published in the Federal Law Gazette Volume 2008 Part I No. 64 Page 2949 only contains the amendments to the law and is less suitable for daily practice.
We will report here on the latest developments in case law based on the UWG 2009.
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Copyright 2008 Goldberg Attorneys at Law
Lawyer Alexander Goldberg
Specialist lawyer for industrial property protection
Specialist lawyer for information technology law (IT law)
