Frankfurt Higher Regional Court: Consent to the use of cookies

On December 17, 2015, Frankfurt am Main Higher Regional Court issued a ruling on a long-disputed topic. Germany had not explicitly transposed the 2009 Cookie Directive, which requires user consent, since the provisions of the German Telemedia Act would sufficiently reflect the requirements – a view also held by the European Commission. German data protection authorities fail to share this view, however, so that the judgment of Frankfurt Higher Regional Court was eagerly awaited. Cookies are used on almost all websites, offering operators a variety of options, such as saving shopping carts or creating user profiles. On the other hand, this also poses certain risks on users which is why consent is required. It is controversial in what form this consent has to be given in Germany. Subject of the proceedings at Frankfurt am Main Higher Regional Court was a consent form where the checkbox to consent to the use of cookies was already pre-filled. In addition, users were offered a link to further information about the cookies. The Higher Regional Court affirmed not only the admissibility of such an opt-out solution, but also considered the information available via the link to be sufficient.

Practical advice: In order to preserve the electronic form, online merchants must ensure that customers can save or print the General Terms and Conditions by click wrapping prior to conclusion of the contract without much effort. The judgment is likely not applicable to the consumer area.

(Non-)transferability of user accounts

According to a ruling of Berlin Higher Regional Court of August 10, 2015, it is permissible to contractually prohibit computer game buyers from transferring the associated user accounts. Although the clause effectively precludes the option of reselling the game due to lacking usability for a secondary buyer, the Court held that it did not violate the copyright exhaustion doctrine. Berlin Higher Regional Court’s ruling follows the Federal Court of Justice's Half Life 2 decision, which was dealing with similar facts. It remains to be seen, however, whether the Federal Court of Justice will continue along this path in its case law, since as a result of the CJEU "UsedSoft" ruling the Federal Court of Justice expressly strengthened the marketability of software in the recent UsedSoft III decision.

Practical advice: Berlin Higher Regional Court considered the principles of the UsedSoft ruling not to be relevant, because a part of the program code required for use remained on the gaming company’s servers and was not copied to the user's system. According to this view, gaming companies can control their games’ marketability by technically designing the game appropriately and by contractually excluding the transfer of user accounts.

ODR Platform for EU Online Traders now active

Starting with the new year, online traders and platforms need to provide new information on their websites regarding the online dispute resolution by the European Commission. The ODR Regulation of the EU (Regulation (EU) No 524/2013) introduces a web-based platform for online dispute resolution (ODR platform) operated by the European Commission. It offers consumers and traders an alternative opportunity of settling their disputes regarding products or services they bought online out of court through online dispute resolution. Information on how the ODR platform works can be found here. As of January 09, 2016, all online traders and platforms located in the EU are obligated to provide certain information about the ODR platform. They need to link to the ODR platform on their websites. The link must be "easily accessible" for the consumers, for example, in the sections Imprint, Contacts, or as a separate provision in the Terms and Conditions.Having fixed the initial technical problems, the ODR platform is now active, and linking therefore possible. The platform is available in all European languages and can be accessed here.

Practical advice: Online traders and platforms should include the following text in their Imprint or Terms and Conditions, for example in a section "Online Dispute Resolution": "The EU Commission provides an online dispute resolution platform (ODR platform). The platform is accessible with the following link:www.ec.europa.eu/consumers/odr".

The digital estate

When looking at the law, it is very clear: Upon the death of a person, that person’s property passes as a whole to the heirs (Section 1922 German Civil Code). Nevertheless, the mother of a fifteen-year-old girl who was killed under unclear circumstances had to file legal action against Facebook about access to the deceased girl’s Facebook account. In its judgment of December 17, 2015 (Case 20 O 172/15), Berlin Regional Court issued detailed grounds for why a contractual relationship with Facebook transfers to the heirs as well and therefore the heirs must obtain access to the Facebook account. Facebook’s objection that this constituted a strictly personal right to which the heirs were not entitled was dismissed. The Court compared the Facebook account with letters and family papers of the deceased that according to law also belong to the heirs. In addition, a landlord would also have to allow the heirs access to the deceased’s apartment and could not search it for personal and property items in advance. Facebook’s Terms of Use would not alter this legal position. Facebook was not worthy of protection since users would not claim personal trust at Facebook..

Practical advice: Even if Berlin Regional Court has ruled in favor of the heirs, certain dispositions should be made for the digital estate during one’s lifetime. Individuals may establish a notarial provision deed for electronic access permissions, depositing access data to the appropriate user accounts for the heirs and other authorized persons with a notary. 

Federal Court of Justice on liability for hyperlinks

In a recently published judgment, the Federal Court of Justice clarified the rules on liability for hyperlinks (Federal Court of Justice of June 18, 2015). Subject of the proceedings was a link on the defendant’s website that forwarded users to a third-party website. One of the subpages of that website contained allegedly anticompetitive content.

The Federal Court of Justice rejected liability of the website operator displaying the link. While the link constituted a commercial transaction for the purposes of competition law, the website operator had not appropriated the content of the linked website from the average user’s perspective. This assessment was governed by the fact that the subject matter of the linked website was not an integral part of the business model of the website operator displaying the link. In addition, the link did not lead to the subpage of the website with the challenged content, but to its homepage.

The Federal Court of Justice clarifies, however, that website operators are responsible to observe reasonable examination duties due to the risk-increasing effect of linking to unlawful content. In the interest of freedom of expression and press, no high demands are placed on the examination. If infringing content of the linked website is not clearly apparent, the website operator displaying the link is only liable where he becomes aware of the content’s unlawfulness and still fails to act.

"Are your friends already on Facebook?" violates competition law

Facebook has changed its practice and allows new users to decide to whom invitations are sent. In its January 14, 2016 judgment (Case: I ZR 65/14 - "Freunde finden"), the German Federal Court of Justice nevertheless makes fundamental statements: Invitation emails sent with the previous Facebook "Finding Friends" function to persons who are not yet Facebook members are inadmissible as harassing advertising under competition law. In the registration process for the "Finding Friends" function (November 2010), Facebook has misled users as to the nature and extent of the use of imported contact data. The Federation of German Consumer Organization successfully filed for an injunction, which was confirmed by all lower courts, and now by the Federal Court of Justice.

Invitation emails from Facebook to recipients who have not expressly consented to the receipt of this type of emails are to be considered unacceptable harassment (Section 7(2)No. 3 German Unfair Competition Act). The Federal Court of Justice classifies such invitation emails as advertising, even if caused by the registering users. This concerned a function made available by Facebook serving to make third parties aware of the Facebook offering. The invitation emails were not understood by recipients as a private message from the Facebook user, but as advertising from Facebook. The company had misled users when registering for the "Finding Friends" function with the details provided by Facebook regarding the nature and extent of email contact data use (Section 5 Unfair Competition Act). The reference in the registration process, "Are your friends already on Facebook?" failed to clarify what would happen next: Email contact data imported by the user were evaluated and invitation emails sent persons not registered on "Facebook." Additional information given under the link "Your password will not be saved by Facebook" is incapable of overriding the deception, because it is not ensured that users will take notice thereof.

Practical advise: The decision concerns not only Facebook, but all online services with a function to refer them to friends. Future development will be interesting. including the assessment of the current practices of Facebook in the light of this decision.

Federal Court of Justice rules on web access blocking

Earlier in 2014, the European Court of Justice already had decided that internet access providers (ISPs) could be made responsible for effectively blocking the access to certain websites. The German Federal Court of Justice (BGH) now specified the preconditions for such blocking within two court procedures.           Both cases (3dl.amgoldesel.to) dealt with the claim for blocking websites which offered links to copyright infringing music material.   The BGH dismissed both claims of the rights holders because – according the court’s opinion – they did not make enough effort to take legal steps against the website operator or host provider. The copyright owner therefore has to first seek remedies against the primary infringers.       However, the BGH acknowledged that ISPs can be enjoined from providing access to websites if they contain predominantly copyright infringing material and if “in total, the legal material was insubstantial compared to the illegal material.” This will not depend on the actual number of legal material, but only whether it outweighs the infringing content.

Conclusion: The Federal Court of Justice for the first time ruled that rights holders have to consider the specific contribution of the infringer and his capability to halt the copyright violations when choosing the right defendant. This take on copyright infringements is new and can cause also ramifications in other internet related cases. The BGH however missed to lay down the details regarding the reasonable efforts the rights holders have to make before seeking claims against the internet access providers. The lower courts will have to decide in this regard.

EU bodies agree on NIS Directive

EU Commission, European Parliament, and EU Council agreed on the "Directive concerning measures to ensure a high common level of network and information security across the Union" (referred to as NIS Directive). After formal adoption of the draft directive, the NIS Directive is expected to enter into force in spring 2016. We have prepared an overview of the most relevant core contents of the NIS Directive on our website.