Influencer activities are becoming an increasingly important marketing approach. Companies and influencers often assume they were operating a legal grey area and that it would be unclear to which extent they must label their publishing as commercial. In fact mistakes in this legal assessment can have severe consequences. The following article describes obligations to label influencer activities as being commercials and latest judgements in the field of influencer marketing. Read More
The Higher Regional Court (OLG) Munich (decision of 10 January 2019 – 29 U 1091/18) has decided that the conclusion of a consumer goods purchase via the Amazon-Dash-Button is intransparent and the contractual provisions unreasonably disadvantage the consumer. It has therefore condemned Amazon to refrain from its business practice at the request of the North Rhine-Westphalian center of consumer protection (“Verbraucherschutz-zentrale NRW”). It is not to be expected that the decision of the Higher Regional Court will constitute an obstacle to innovative business models. On the contrary, the implementation of the legal requirements will make a decisive contribution to “multichannel shopping” in line with consumers’ and service providers’ interests.
The following article summarizes the court’s decision and provides information on how the transparency requirements can be implemented into the Dash-Button in a legally secure manner. Read More
The General Data Protection Regulation (GDPR) widely expands application of European data protection law. Thus, non-European companies will fall increasingly within the scope of European data protection law. The scope of application in detail remains uncertain and can pose serious legal challenges to non-European companies. Where European data protection law claims its application there is a serious likelihood of conflicts with the rules of their national (data protection) law.Read More
The General Data Protection Regulation (GDPR) is a legal instrument of importance for the European Economic Area (EEA). Pursuant to Article 7(a) of the Main Agreement on the EEA (EEA Agreement), all EEA-States are obliged to adopt the GDPR domestically. This applies not only to the EU member states but also to the EFTA States Iceland, Lichtenstein and Norway. The following article shows the detailed composition of the EEA (1.), on which basis the GDPR will apply in the EEA (2.) and how the corresponding incorporation procedure is structured (3.).
Customer data is one of the most important assets of many asset deals. If they are not transferred correctly, however, they are worthless for the buyer. In addition, it can be expensive for both the selling and acquiring company.
Data protection law is more than ever undergoing a radical change. The introduction of the EU’s General Data Protection Regulation (GDPR) and the continuous development of new technologies raise countless questions. If you want to stay informed about the latest discussions, trends and judgements, you need high-quality and up-to-date sources. The European Data Protection Law Review (EDPL) aims to meet this need. A review.Read More
The Federal Labour Court (Bundesarbeitsgericht) had to decide on the effectiveness of the termination of a web developer who used substantial parts of his working time for private activities. The employer had gained this insight by using a keylogger, without any concrete suspicion of a criminal offence or serious breaches of duty by the employee. (Judgment as of 27.07.2017, BAG 2 AZR 681/16).
Beginning of August, Bitcoin went through its first “hard fork”. Users who kept their Bitcoin in their own e-wallet now have access to an equal amount of “Bitcoin Cash”. But what if the Bitcoins are deposited at an online trading platform? Is the platform obliged to hand out the new cryptocoins to its users?
The statutory law for the alternative dispute resolution in customer affairs “Gesetz über die alternative Streitbeilegung in Verbrauchersachen” (VSBG) was published in the Bundesgesetzblatt on 23 February 2016 and entered into force on 1 April 2016. Since, 1 February 2017 some additional mandatory references are required in §§ 36, 37 VSBG which are often forgotten in practise. This minor error has a great impact.
It is useful to take a closer look at the implementation of required information in practice so far.
1. What might happen in case of a lack of the required references?
The VSBG does not provide any legal consequences which means at least, there is no basis for any fine to be imposed by the authorities. However, warning letters based on the competition law (Gesetz gegen unlauteren Wettbewerb – UWG) might cause serious harm to companies. During the last months, several court decisions set the value in dispute on 10k € and even more. Therefore, the following statements shall give an overview about the VSBG.
2. What are the statutory required references?
The law differs between pre-dispute references (Art. 36 VSBG) which means required references prior to any conflict situation between customer and company and required references in conflict situations.
a) Pre-dispute references
Companies are generally obliged to inform customers in a simple and comprehensible manner whether they are participating in an alternative dispute settlement procedure.
This requirement applies to all companies who conclude contracts with customers and maintain a website and/or have general terms and conditions (GTC) in place. The information need to be easily accessible and inform the customer clearly and comprehensibly whether the company is participating in an alternative dispute resolution procedure and which concrete dispute resolution organisation is responsible in case of dispute.
Exempt from this obligation are only small-scale companies who had employed up to ten (10) employees on 31 December of the preceding year, unless they are otherwise obliged to participate in the dispute resolution procedure. Such an obligation might arise out of a participation in an economic association which requires a compulsory dispute settlement for their members.
b) Obligation in case of dispute
In addition to this general obligation, the law provides specific requirements in case a dispute has already arisen out of a customer contract and cannot be settled.
These requirements must be taken into account by companies regardless of their number of employees. The company need to inform the customer of his or her willingness/duty to participate in the alternative dispute resolution procedure and provide specific information on the responsible dispute resolution organisation.
According to the law companies are obliged to provide customer information after a dispute exists, even, if the company rejects to participate in such a procedure. According to the wording of Article 37 VSBG, in this case the company is obliged to designate the customer compensation organisation which would be hypothetically responsible to lead the dispute resolution procedure, even if the information is completely useless to the customer.
3. Practice Note
To implement the aforesaid requirements, the following formulations could be used:
a) Precautionary information obligation
“We are not participating in a dispute resolution procedure.”
b) Information obligation in case of dispute
In case of a failed settlement, the following information should be sent by e-mail – an oral note is not sufficient:
“In case of any disputes, the Dispute Settlement Office, Center for European Customer Protection, Bahnhofsplatz 3, 77694 Kehl, phone: 07851/991480, E-Mail: firstname.lastname@example.org, www.online-schlichter.de. We do not, however, participate in the dispute settlement process.”
A list of officially recognized dispute settlement organisations can be found here.
4. Where are the information need to be published?
a) Precautionary information obligation
In addition to the link to the so-called ODR platform, which is usually found at the imprint of each website, the reference to the dispute resolution organisation is to be included in the terms and conditions published on the website.
If no general terms and conditions are published, for example because a conclusion of a contract cannot/should not be made directly via website, another suitable place is to be found. The imprint could be a good place, next to the ODR platform’s link.
b) Information obligation in case of dispute
If a complaint management is established, the reference should be standardized included in the e-mail’s signature.
It depends on the individual case whether a neutral arbitration body can prevent a court dispute and serve the customer satisfaction. In our opinion, a professional complaint office is likely to achieve similar goals more efficiently and perhaps even contribute to long-term customer loyalty. Notwithstanding participation, company should implement the above-mentioned information in order to avoid any warnings based on the competition law.
The European Court of Justice (ECJ) (decision of 26 April 2017, ref: C-527/15) needed to decide whether the distribution of multimedia player enabling free access to audiovisual works protected by copyright without the consent of the right holders might be illegal.
The defendant sold on a number of internet sites various models of a multimedia player. That player is a device which acts as a medium between, on the one hand, a source of visual and/or sound data and, on the other hand, a television screen. On that player, the defendant stalled an open source software, which makes it possible to play files through a user-friendly interface via structured menus, and integrated into it, without alteration, add-ons available on the internet, created by third parties, some of which specifically link to websites on which protected works are made available to internet users without the consent of the copyright holders. Those add-ons contain links which, when they are activated by the remote control of the multimedia player, connect to streaming websites operated by third parties, some of which give access to digital content with the authorization of the copyright holders, whilst others give access to such content without their consent. In particular, the add-ons’ function is to retrieve the desired content from streaming websites and makes it start playing, with a simple click, on the multimedia player. The defendant advertised the multimedia player, stating that it made it possible, in particular, to watch on a television screen, freely and easily, audiovisual material available on the internet without the consent of the copyright holders.
Initial, the Dutch foundation gave the defendant a last warning. On the basis of unexplained legal questions, the competent local District Court suspended the proceedings and submitted questions to the ECJ for a preliminary ruling. Regarding to these questions the ECJ decided the sale of the disputed player is a “public broadcasting” in the meaning of Article 3 sec. 1 of Directive 2001/29/EC and such devices are not excluded from the exclusive reproduction author’s right. The distribution of such a player leads to a copyright infringement.
I. Legal Status
Watching streamed online video is hold as non-infringement proceeding, since the user does not store any copy on his device. That means it does not reproduce the video in the legally sense of sec. 44a of the German Copyright Act (UrhG).
Against this backdrop, up to the decision of the ECJ the distribution of devices which play copyright-infringing online streams was regarded as lawful. The ECJ ruling switch this point.
II. Public Performing Rights and Reproduction Rights
The ECJ dealt with the question whether the player is “merely a physical provision devices” which in itself does not constitute a copyright infringement of “communication to the public”, or whether it might be itself a “public reproduction”.
According to the ECJ ruling it is already a public reproduction itself.
The ECJ referred to its case law that interpreted the concept of “communication to the public” in a broad meaning, to install a high-level protection of authors’ rights. Therefore, two cumulative criteria, namely an ‘act of communication’ of a work and the communication of that work to a ‘public’ need to be fulfilled.
Amongst those criteria, the Court has emphasised, above all, the essential role played by the defendant. The defendant makes an act of communication when he intervenes, in full knowledge of the consequences of his action, to give access to a protected work to his customers and does so, in particular, where, in the absence of that intervention, his customers would not, in principle, be able to enjoy the broadcast work.
Next, the ECJ has specified that the concept of the ‘public’ refers to an indeterminate number of potential viewers and implies, moreover, a fairly large number of people who potentially might buy the multimedia player.
The ECJ also dealt with the question of whether temporary reproductions for video streaming might be reproduction of the copyright owner according to Article 2 of Directive 2001/29.
Under Article 5 (1) of Directive 2001/29, an act of reproduction may be exempted from the reproduction right provided for in Article 2 thereof only if it satisfies five conditions, that is, where
- the act is temporary;
- it is transient or incidental;
- it is an integral and essential part of a technological process;
- the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject matter; and
- that act does not have any independent economic significance.
Furthermore, Article 5 (5) of Directive 2001/29 does not affect the “normal” exploitation of any work or any other protective article, or the legitimate interests of the right holder are not unduly infringed.
The court held at least the condition 4 is not fulfilled by the multimedia player in disputable, since no legal use might be possible.
Furthermore, Article 5 (5) of Directive 2001/29 is also affected, according to the exception of the exclusive right for reproduction is unlikely to affect the media player as a result of the copyright owner which infringes the normal exploitation by the authors and unduly violates the legitimate interests of the rightsholders.
III. Transfer to other issues
The ECJ ruling raised the concerns that it could be applied to any other devices for playing illegal content, such as the PC.
However, this concern could be seen to be unjustified.
The ECJ itself held the main incentive for using the media player with its pre-installed add-ons is to get access to an unauthorized offer of copyright protected works.
The players were actively advertised to grant that access to copyrighted content and were actually able to provide it. It was also considered by the ECJ that the defendant acted with the intention of making profit by violating copyrights.
In contrast to an ordinary computer, which also grants access to illegal content, the special feature of the multimedia player dependents on its application and the range of functions to receive and display copyright-infringing content. The main difference to devices providing an ordinary browser, which allows access to unlawful content, is that the multimedia player was delivered with a browser, which is explicitly pre-set to make illegal content available without further hurdles, so the copyright infringements will be caused by the pre-configuration.
The ruling also points out that multimedia media player such as those at issue got addressed by the judgment, only.
In contrast to the public debate, the ECJ has not declared the streaming of content being against the law, it says the distribution of multimedia media player, which grants easily access to unlawful content according to the prior PR advertising need to be prohibited. No findings can be picked out of the judgment, which can lead to a mass warning of user.