Online businesses have to be aware of a plethora of consumer protection rules when selling products online. If toys are being sold, there is also a whole host of legislation designed to safeguard toy safety. If businesses get it wrong, they could face costly competition warning letters.
Safeguarding toy safety
In the interests of toy safety, products should be labelled with appropriate warning notices.
A German court has ruled that such safety notices should explicitly include the word “warning” (judgment from 16.05.2013, 4 U 194/12).
In the case before it an online business owner trading in children’s toys had replaced the word “warning” with the term “safety notice”.
A competitor sent the owner of the toy business a competition warning letter for breaching Germany’s unfair competition rules. The competitor relied on a violation of § 11(3) of the Second set of Regulations concerning Germany’s Device and Product Safety Act, which states that all toy safety notices must start with the word “warning”.
Given the clear violation of § 11(3) as mentioned above, the court had to decide whether there was any legal basis for the competitor to send a competition warning.
It found such a legal basis in § 4(11) of the German Unfair Competition Act. This paragraph prohibits business practices which breach legislation designed to safeguard consumer protection.
Clear warning label required
The court took the view that the words “safety notice” gave the impression of being a recommendation rather than a warning. Whereas, the aim of § 11(3) was to make any increased product risks abundantly clear to consumers. Should a business fail to fulfil this requirement, competitors are free to challenge the business practice with commercial warning letters, the court concluded.
Online businesses should therefore bear consumer protection legislation in mind when selling products. When selling toys, sector-specific toy safety legislation should also be adhered to. Moreover, online businesses should also consider other extensive distance selling rules, such as a consumer’s right of withdrawal within 14 days.