German Federal Courtroom of Justice on Social Media Promoting for Merchandise offered freed from Cost | Hogan Lovells

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Details

The plaintiff, a contest affiliation, first despatched a warning letter to the defendant influencer in July 2018 as a result of she had tagged firms in images on Instagram with out labeling the posts as promoting. As quickly as one clicked on the images, the names of the businesses manufacturing the equipment and clothes worn by the influencer, marked by the use of faucet tags, turned seen. When clicking on the faucet tags, the consumer was taken to the corporate’s profile web page. On account of the warning letter, the influencer conceded a cease-and-desist declaration to the plaintiff.

In October 2019, three new posts have been revealed on the Instagram account of the identical influencer, once more marked with corresponding faucet tags. Partially, the linked merchandise had been given to the influencer freed from cost; partially, the influencer had bought the merchandise utilizing her personal funds.
Within the opinion of the plaintiff, this constituted a breach of the influencer’s signed cease-and-desist declaration. The plaintiff subsequently demanded fee of a contractual penalty and the signing of an extra cease-and-desist declaration. Nevertheless, the influencer solely partially complied. The plaintiff then filed a grievance with the Cologne District Courtroom. Each the Cologne District Courtroom in addition to the Larger District Courtroom of Cologne, because the attraction occasion, granted the plaintiff’s claims.

Resolution

In abstract, the BGH to a big extent confirms the choice of the Attraction Courtroom.
First, the BGH repeats the rules deriving from its earlier influencer selections coming to the conclusion that, via the disputed Instagram posts, the influencer had acted in commerce each for the good thing about her personal firm and for the good thing about the third-party firms (see our article on the choice).

In accordance with its opinion expressed within the earlier selections, the BGH differentiates between acts in favor of 1’s personal firm and acts in favor of third-party firms when assessing the unfairness of enterprise acts.

As a reminder, the BGH had dominated that Part 6 (1) No. 1 of the German Telemedia Act, Part 58 (1) Sentence 1 of the Broadcasting Treaty and Part 22 (1) Sentence 1 of the State Media Treaty, which every require a consideration for the existence of a “business communication” or “promoting”, would restrict the scope of utility of the final unfair competitors provision of Part 5a (6) of the Act towards Unfair Competitors as sector-specific particular provisions. If there was no consideration, a violation of Part 5a (6) of the Act towards Unfair Competitors couldn’t be thought-about (see our article on influencer case legislation).

In accordance with this case legislation, an infringement of Part 5a (6) of the Act towards Unfair Competitors needs to be rejected additionally within the current case with regard to these merchandise bought by the influencer herself from the corporate.

Nevertheless, this needs to be assessed differently with regard to these merchandise having been offered to the influencer freed from cost, which should to be considered a “consideration” throughout the that means of Part 6 (1) no. 1 1 of the German Telemedia Act, Part 58 (1) sentence 1 of the Broadcasting Treaty and Part 22 (1) sentence 1 of the State Media Treaty. The aim of those particular provisions, i.e. to stop hidden promoting, is barely achieved if each financial benefit – within the current case additionally merchandise freed from cost – is known as a consideration. Offering merchandise at no cost had been the one trigger for publishing the Instagram posts in query, which was additionally the intention of the businesses. Furthermore, the exact worth of the merchandise offered at no cost isn’t related, at the least quantity when it comes to worth doesn’t exist.

Conclusion

By this ruling, the BGH has additional consolidated its maturing case legislation on the subject of influencer and social media advertising and marketing. Even when the choice doesn’t come as an awesome shock, the clarification that the promoting of merchandise offered freed from cost also can represent a business communication or promoting, which is topic to labeling necessities, gives extra authorized certainty in observe. By this ruling, the BGH can also be in step with the CJEU. The latter lately dominated {that a} publication throughout the that means of No. 11 p. 1 of Annex I of Directive 2005/29 is “paid” if a consideration of financial worth is offered. That is the case not solely with the fee of an amount of cash, but additionally with another type of profit, offered there’s a clear connection between the profit granted and a publication.



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