E-commerce law: over the summer in Germany, a number of noteworthy judgments and decisions were handed down by the courts on the rights and duties of online businesses. We have summarised these court rulings so that you gain a broad picture of the law on e-commerce in Germany.
Passing on sales data to the finance office
Online business’ sales data concerning transactions on internet platforms such as eBay or Amazon are difficult for finance offices in Germany to get hold of. As a result, the finance authorities had planned to obtain the data directly from the online platforms. This would have meant that platforms like eBay would have been required to pass on sales data belonging to third party e-commerce businesses which use the platform.
The platform operators refused to pass on the sales data and defended a claim all the way up to Germany’s Federal Finance Court (Bundesfinanzhof).
The operators argued that they are prevented from divulging such information under their parent companies’ regulations.
The federal court countered that a private-law contract between two parties concerning confidentiality does not stand in the way of the finance authorities’ request for information.
The decision is not yet legally binding as the case has been remitted to the lower court for a decision on the facts. The question the court will have to answer is whether the information request is illegal because it is disproportional. Online traders’ sales data therefore remains safe for now.
Missing privacy statement
In recent past, the Court of Appeal in Berlin took the view that online businesses were not breaking the law if they failed to include in their privacy statements details about the effects of integrated Facebook “like” buttons.
The Higher Regional Court of Hamburg, however, is of a different opinion. It stated that the rules on privacy and the information which must be provided to consumers not only protect internet users but also competitor businesses.
The online trader in the case had neglected to inform users of its website that data collected through the Facebook like button would be used for commercial purposes.
It seems unlikely that a quick solution to the debate will be found. In the meantime, it appears that online business should err on the side of caution and ensure that they have comprehensive privacy statements which inform website users about how their personal data will be handled.
Legal notices and e-mail addresses
There are strict rules in Germany concerning the legal notices which e-commerce businesses must display.
Under § 5(1)(2) of Germany’s Telemedia Act online businesses must provide an e-mail address under which consumers can contact them quickly.
Many e-commerce businesses attempt to avoid this obligation by providing a series of telephone and fax numbers, or a contact form.
This was this case with an Irish airline which sought to sidestep the high number of customer enquiries and spam mail.
The appeal court in Berlin ruled that this behaviour breached Germany’s Telemedia regulations and ordered the airline to provide an “address for electronic post”. It clarified that telephone numbers, fax numbers and contact forms are not the same as e-mail addresses. The court also noted that an airline of this size had a particular duty to communicate with its customers. As a result, an e-mail address must be provided in the legal notices.
Amazon and the “button solution”
The so-called “button solution” has been in effect in Germany since 1.8.2012. It describes the clear and effective labelling and positioning of the order button on a website. The „buy now“, „purchase now“ or „order now“ button must clearly signal to a consumer that by clicking it, they are entering legally binding financial obligations.
In a case concerning Amazon, the e-commerce portal had offered premium membership with one month’s free trial. At the end of the free trial the membership was automatically extended. At the same time, a fee became payable.
The button displayed by Amazon did not draw attention to the fact that financial obligations would later arise. Instead, it simply contained the words “free trial now”. This implied that consumers were not entering any financial obligations.
The Regional Appeal Court of Munich prohibited Amazon from using a button of this kind. It explained that the contractual rights and obligations created in the contract between the company and the consumer and creating the, albeit delayed financial obligation, were entered into from the very beginning. Consequently, Amazon was ordered to design the button in accordance with the button solution.
The button solution was designed to avoid precisely these kinds of cases and it applies to all e-commerce businesses.
Online businesses should ensure that their order buttons clearly indicate whether a consumer is entering a financial obligation.
There are a series of rules and regulations on e-commerce in Germany. To ensure your business remains legal, it is advisable to seek legal support when designing or re-designing your website.
Contact our expert team of German lawyers for more information.