25. March 2013
The Hamburg-based law firm Bode & Partner has been instructed by Order Online USA Inc. to send hundreds of competition infringement warning letters to internet businesses. Here is an overview of the content of the warning letters.
The warning letter begins by listing the various domains which Order Online USA Inc. operates. These include usaproductshop.com, restpostenverzeichnis.info and numerous shopping websites such as shopnavigation.com and tv24store.com. Bode & Partner claim that as a provider of similar services, the recipient of the warning letter is deemed to be a direct competitor of Order Online USA Inc. The law firm then sets out the alleged competition infringements upon which the warning letters are based.
1. Incorrect summary of product
In the warning letter, Bode & Partner asserts that the recipient has breach his obligations under §312g sub-paragraph 2 German Civil Code and article 246 Introductory Act to the German Civil Code (specifically Art. 246 §1 sub-paragraph 1 no. 4 1st half sentence). These provisions require businesses to provide consumers with information concerning the main features of a product before placing an order online. In the case of textiles, such information may include: washing instructions, material, manufacturer, country of origin and size. This obligation is designed to protect consumers. In the case of a failure to provide such information consumers’ decision-making ability is deemed to be diminished by such an extent that it amounts to an unfair business practice and thus a breach of competition rules (see § 3 Unfair Competition Act).
2. Incorrect “button solution”
The warning letter also alleges that the recipient has infringed rules concerning the so-called “button solution”. These rules state that the operator of an internet shop must ensure that the website is designed in such a way as to require a consumer to expressly confirm that he is aware that he is about to enter a legally binding contract and so be obliged to pay for goods or services ordered.
This is usually achieved by utilising buttons on websites which use expressions such as “proceed to payment” or “buy”. However, the warning letter accuses recipients of breaching these rules by using unclear expressions such as “confirm order”.
To secure evidence, Order Online USA Inc. engaged a monitoring company to record the alleged competition infringements with screenshots.
The recipient of the warning letter is then required to submit a declaration to cease and desist. The declaration foresees the imposition of a contractual penalty should future infringements occur.
A further demand made of the recipient of the warning letter is to pay Order Online USA Inc.’s legal fees based on a claim value of 20,000 euros. However, a settlement offer of 770 euros is made. A deadline of a few days to pay the sum is usually given.
Given the sheer number of warning letters which have been sent out by Bode & Partner over the past few days, there is no doubt that a new warning-letter wave is spreading throughout Germany. To ascertain whether the demands contained in the letters are justified, each letter needs to be assessed individually. There are some indications to suggest that not every letter contains legally solid demands.
If you have received a warning letter from the law firm Bode & Partner, it is advisable in the first instance not to sign the declaration to cease and desist or to pay the sum being demanded. Even though the deadline for action may be short, it is advisable to seek legal advice from a lawyer specialised in competition law. We would be happy to advise you.
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