The realm of fashion and lifestyle blogging represents a highly lucrative business. Many influencers/bloggers operate their blogs full-time, often commanding a substantial follower base and generating six-figure revenues. These revenues are primarily derived from companies for whom the influencers/bloggers promote products or services. The critical question, however, is whether these influencers/bloggers are obligated to label their content as advertising.
When is a post/content required to be labeled as advertising?
The plaintiff, Verband Sozialer Wettbewerb e.V., issued a cease-and-desist letter to a prominent influencer/fashion blogger concerning three Instagram posts. In these posts, the defendant referenced products from various manufacturers via embedded "tags." These posts were not explicitly labeled as advertising. In response to the plaintiff's legal action, both the Cologne Regional Court (LG Köln) and the Cologne Higher Regional Court (OLG Köln) ruled that the defendant was obligated to label the posts as advertising, subsequently ordering the defendant to cease the practice and pay a contractual penalty.
Do influencers engage in commercial practices?
The Cologne Higher Regional Court (OLG Köln) determined that the posts by the defendant influencer/blogger constitute a commercial act under Sections 2, No. 2, and 3 Paragraph 1 of the German Act Against Unfair Competition (UWG). A commercial act is defined as conduct related to the promotion of one's own or another's sales.
The defendant influencer/blogger had previously received specific considerations from the manufacturers of the promoted products. Furthermore, the presence of at least circumstantial evidence indicating the promotion of the manufacturers' sales was deemed sufficient to establish a commercial act. According to established jurisprudence, embedded tags within the posts, specifically links to the manufacturers' websites, were considered adequate evidence for this.
The commingling of editorial content and advertising did not alter this conclusion. The German Act Against Unfair Competition (UWG) specifically aims to prevent such "mixtures."
Why are influencers required to label posts/content as advertising?
The influencer/blogger was required to label her post as advertising under Section 5a Paragraph 6 of the German Act Against Unfair Competition (UWG), as failure to disclose the commercial purpose could otherwise mislead consumers into making an incorrect business decision.
Are influencers obligated to inform their followers which Instagram posts constitute advertising?
According to the Cologne Higher Regional Court (OLG Köln), even Instagram profiles with extensive reach are not necessarily commercially motivated. Consequently, users are not automatically required to assume a commercial intent. Each case must be evaluated on an individual basis.
The defendant influencer/blogger's downfall was further exacerbated by the following: She emphasized the importance of authenticity and honesty in her posts, and also engaged with social issues. The Cologne Higher Regional Court (OLG Köln) stated that this practice further misled users. Users would develop a perception of an 'honest' influencer/blogger that they would not form for a consciously 'ad-funded' influencer/blogger.
Which posts/content are not required to be labeled as advertising?
According to the Cologne Higher Regional Court (OLG Köln), posts do not require labeling if the blogger has not received direct payment from the manufacturer, the manufacturer has not provided an indirect benefit, and there is no unilateral or excessive prominence given to the objectively favored manufacturer.
The blogger was unable to furnish this proof.
How can influencers/bloggers prevent cease-and-desist letters?
First, some positive news: The Cologne Higher Regional Court (OLG Köln) has granted leave to appeal to the Federal Court of Justice (BGH). It remains currently unclarified by the highest court under what specific conditions commercial motivation exists in influencer advertising, as per Section 5a Paragraph 6 of the German Act Against Unfair Competition (UWG). It is hoped that the BGH will establish clear guidelines for influencer advertising in this respect.
Until the Federal Court of Justice (BGH) provides clarification, Section 5a Paragraph 6 of the German Act Against Unfair Competition (UWG) presents a precarious balancing act. Lower courts predominantly rely on circumstantial evidence to determine commercial motivation. The indicators identified by the Cologne Higher Regional Court (OLG Köln) were:
– no direct payment from the manufacturer.
– no indirect benefit provided by the manufacturer (e.g., clothing, accessories).
– no unilateral or excessive prominence given to the manufacturer.
According to the legal interpretation of the Cologne Higher Regional Court (OLG Köln), advertising requiring labeling is present as soon as just one of the aforementioned criteria is met.
Source: Cologne Higher Regional Court (OLG Köln), Judgment of February 19, 2021, File No. 6 U 103/20
Lower Instance: Cologne Regional Court (LG Köln), Judgment of July 21, 2020, File No. 33 O 138/19
We assist you in establishing your influencer campaigns on a legally sound foundation, encompassing both competition law and contract law aspects. We are pleased to draft appropriate influencer contracts tailored to your needs.
GoldbergUllrich Attorneys at Law 2021
Julius Oberste-Dommes LL.M. (Information Law)
Attorney-at-Law and
Specialist Attorney for Information Technology Law
