The new provisions of the reform of the Unfair Competition Act include the obligation to disclose who the other party is, regulations on ranking systems and restrictions in the area of online reviews.
Who are you?
The legislator considers market participants to have a duty to inform consumers whether they are traders or not. This is important for consumers, especially for rights that are also outside the UWG. What constitutes material information that must be disclosed is regulated in Section 5b para. 1 No. 6 UWG:
„Where goods or services […] are offered in such a way that an average consumer can conclude the transaction, the following information shall be considered material […]: in the case of goods or services offered via an online marketplace, information as to whether the provider of the goods or services is a trader according to his own declaration to the operator of the online marketplace.„
(Hervorhebung = Nr. 6)
This means that on the offer pages of online marketplaces (e.g. Amazon Marketplace), it must be stated whether the provider is an entrepreneur or a private individual. This depends on the information provided by the potential supplier in the relationship with the online marketplace.
This information is essential for consumers to be able to assess what rights they have vis-à-vis their contractual partner. For example, numerous revocation regulations from the German Civil Code (BGB), as well as specific warranty rights, are linked to the existence of a contract between an entrepreneur and a consumer.
The problems of ranking systems
Rankings are undoubtedly very popular. They give the consumer information at a glance about who or which product (supposedly) performs best in a certain category. In practice, only the first results of such a ranking are relevant for consumers when choosing a product. However, the consumer is quickly misled. A ranking can be based on completely different parameters and thus deliver different, possibly undesirable results. Conversely, the consumer has a (legitimate) interest in having the parameters for a ranking disclosed.
This interest is taken up by the new provision of Section 5b UWG in paragraph 2:
„[…] 1. the main parameters for determining the ranking of the goods or services presented to the consumer as a result of his search query, and
2. the relative weighting of the main parameters for determining the ranking compared to other parameters.“
§ Section 5b para. 2 UWG
Essential information for the consumer is therefore the main parameters that have influenced a ranking and the weighting of these parameters in relation to each other. Knowing this information, the consumer is able to determine whether the weighting of the parameters corresponds to the parameters that are relevant to their purchase decision.
Fake online reviews
It is not only rankings that have a major influence on consumers‘ purchasing decisions, but also customer reviews. Since as many positive reviews as possible leave a trustworthy and positive impression, retailers have an interest in „promoting“ such reviews that should not be underestimated. The new Section 5b para. 3 UWG now aims to provide a legal framework for this:
„Where a trader makes available reviews that consumers have made in relation to goods or services, material information shall include whether and how the trader ensures that the published reviews originate from consumers who have actually used or purchased the goods or services.“
§ Section 5b para. 3 UWG
The essential information that a trader must provide includes whether and (if so) how he checks the reviews published about him to ensure that they originate from consumers who have actually used or purchased the goods.
It is important to recognize that a trader can also simply point out that they do not check reviews. This reduces the usefulness of this information for consumers, especially in comparison to the other information. On the one hand, the consumer now knows that they cannot rely 100% on the reviews presented and their accuracy. On the other hand, there is still the assumption and/or hope that the accuracy of a particularly large number of positive reviews is also given.
The legislator could have avoided this problem if it had stipulated an obligation to check the accuracy of reviews presented on websites. If the company voluntarily checks the accuracy of reviews, it must also explain how it ensures this.
Need for action for entrepreneurs and online retailers
Entrepreneurs need to take action in the three areas described above. The areas previously only regulated by case law are now clearly defined by the new Section 5b UWG. Even if individual aspects of the new regulations have to be specified by case law, it is not advisable to wait until these decisions are made. Failure to comply with the regulations could result in compensation payments and/or substantial fines.
Themenschwerpunkt Wettbewerbsrecht
In unserem Themenschwerpunkt „Anforderungen im Wettbewerbsrecht“ gehen wir auf die Änderungen durch die jüngste UWG-Novelle ein und stellen die Herausforderungen für Unternehmen und Unternehmer dar. Bisher erschienen in dieser Reihe ein Überblick über den Verbraucher-Schadensersatz sowie den Geldbuße-Regelungen, der Influencer-Rechtsprechung und die damit einhergehenden Neuerungen im UWG (auch) für Influencer, notwendige Anpassungen im eCommerce und Einschränkungen beim Vertrieb von sog. Dual Quality-Produkten.