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New competition law – consequences for trade?

##1. New terms – “aggressive business practices”, Section 4a UWG{.h4}

With many innovations, retailers only have to adapt to changes in the terms used. So it goes without saying that the UWG now explicitly states that unfair commercial actions are inadmissible and therefore give rise to claims for injunctive relief, damages and information.

What is new, however, is the ban on so-called “aggressive business practices”. A trader acts unfairly if he carries out an aggressive commercial action that is likely to cause the consumer or other market participant to make a business decision that he or she would not otherwise have made. What is new in the German UWG is the term “aggressive business action”; Retailers will therefore hear this term more often in the future.

What is meant is the following: A commercial act is aggressive if, in the specific case, taking all circumstances into account, it is likely to significantly impair the freedom of choice of the consumer or other market participant through harassment, coercion, including the use of physical force, or undue influence. There is another innovation hidden here that retailers must be prepared for: The ban on aggressive business actions now also applies to the B2B sector! For example, it cannot be ruled out that repeatedly sending unsolicited emails or fax messages or flyers to companies will now be viewed as a violation of the UWG, whereas this previously only applied to consumers. It is therefore strongly recommended that you obtain the consent of the addressed company before sending advertising offers, regardless of the form. This sounds complicated - and it is - but should not be underestimated in view of the legal changes.

The following should be known about the concept of undue influence: According to the new version of the UWG, undue influence occurs when the entrepreneur exploits a position of power over the consumer or other market participants to exert pressure, even without the use or threat of physical violence , which significantly limits the ability of the consumer or other market participant to make an informed decision. The concept of “position of power” and its exploitation is likely to be of great concern to the courts. To what extent case law will identify case groups in the B2B sector remains to be seen, because such a position of power does not generally exist in the B2B sector. In business dealings with consumers, the position of power can be a position that the company gains through the impact of its advertising, such as competitions that are specifically aimed at young people. Here, retailers should closely monitor how the case law develops.

Before the law was changed, “professional care” was sometimes decisive for unfairness. It is important for assessing the legality of commercial actions towards consumers. It is now called “business care” and continues to mean the standard of skill and care that an entrepreneur can be assumed to maintain in good faith in his area of activity towards consumers, taking into account honest market practices. According to the new version of the UWG, business activities that are aimed at or reach consumers are unfair if they do not correspond to commercial care and are likely to significantly influence the consumer's economic behavior. In terms of content, the legal situation does not change; However, retailers should not be unsettled by the new terms.

###2. Withholding of essential information, § 5a UWG{.h4}

Another important change to the UWG concerns the withholding of essential information. Retailers should also always keep these innovations in mind, especially the UWG regulations on information obligations towards consumers. Anyone who in a specific case, taking into account all the circumstances, withholds from the consumer essential information which the consumer needs, depending on the circumstances, in order to make an informed business decision and whose withholding is likely to cause the consumer to make a business decision, acts unfairly. which he otherwise would not have met. Withholding is synonymous with concealing essential information, providing essential information in an unclear, incomprehensible or ambiguous manner, and failing to provide essential information in a timely manner.

What is new here is the “materiality of the information” and its ability to prompt the consumer to make a decision that he would otherwise not have made. According to the new law, only information that the consumer actually needs in order to make an informed business decision in a specific case is “essential”. The case law will have to show what these will be in individual cases. However, it is advisable for retailers to provide detailed information here, as it cannot be ruled out that the amendment to the UWG will lead to a new flood of warnings due to alleged violations of the new UWG.

The wording of “suitability” seems to help the entrepreneur at first glance: he is allowed to argue that there is a lack of suitability or that the consumer would have made the business decision even with the information withheld. Here the courts will have to decide to what extent they consider the consumer to be of age or immature, especially in the age of the Internet. In any case, retailers should keep these options in mind if allegations of insufficient information are made.

####3. Advertising banners and Adwords

The question of whether essential information has been withheld from the consumer is particularly relevant for advertising and marketing through advertising banners and AdWords. Here, the advertising entrepreneur regularly has the problem of disclosing all essential information in a summarized form. The new version of the UWG takes this into account. When assessing whether information has been withheld, consideration must be given to spatial or temporal limitations imposed by the means of communication chosen for the commercial transaction, as well as any measures taken by the entrepreneur to make the information available to the consumer in ways other than the means of communication chosen deliver. This means: The essential information does not necessarily have to be included in the advertising if the entrepreneur provides the information elsewhere and this is so clear and transparent that it can no longer be said to be withheld. For example, if there is not enough space available to display all essential information, a clear reference to a website that contains this information clearly and transparently is sufficient.

####4. Deletion of the ban on coupling, Section 4 No. 6 UWG old version

With the new version of the UWG, the legislature has deleted the ban on linking competitions or competitions to sales transactions without replacing it. According to case law, the former provision in the UWG was actually contrary to European law. However, case law has repeatedly dealt with the ban. The deletion now provides the necessary clarity that the right to participate in competitions and competitions can be made dependent on the purchase of the goods.

This is initially good news for retailers. However, it should not be overlooked that such a tying can prove to be anti-competitive if it otherwise violates the principles of fair competition, for example if it turns out to be an “aggressive business practice” or if essential information is withheld from the consumer. The deletion therefore does not contain any carte blanche.

####Conclusion

Retailers should understand the changes to the UWG carefully. What is new is that aggressive marketing can now also be anti-competitive towards other entrepreneurs. The new version of the provision on information obligations should be carefully observed, as a new wave of warnings cannot be ruled out. The clarifying deletion of the coupling ban is to be welcomed; Nevertheless, it is not a license that would now allow any coupling. The future will show how the jurisprudence interprets the innovations. Retailers will follow these closely in order to stay safely within the limits of competition law.

dr Andrelang, LL. M

Specialist lawyer for international business law

Specialist lawyer for commercial and corporate law

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