Advertising

Regulation

What rules govern advertising on the internet?

Online advertising must comply with the Act on Unfair Commercial Practices, which regulates the market behaviour of companies. Under the act, causing  ‘unacceptable nuisance’ to market participants is illegal. Advertising that uses a medium suited to distance marketing through which a consumer is persistently solicited (even when they have objected to being contacted) is considered an unacceptable nuisance. The following types of ads are also deemed unacceptable nuisances under the act:  

  • ads in which the identity of the party on whose behalf the communication is transmitted is concealed or kept secret;
  • ads that violate Section 6(1) of the Telemedia Act;
  • ads that prompt recipients to visit a website that violates Section 6(1); or
  • ads that provide no valid address to which recipients can request that no further messages of that nature are sent without incurring transmission costs pursuant to the basic rates.

This means that advertising must always be labelled as such. If AdWords, banners and pop-ups are used, they must disclose correctly their commercial character and may need to be appropriately labelled. Influencer marketing and viral marketing (eg, refer-a-friend schemes) should not be used as surreptitious advertising. Electronically supported refer-a-friend schemes have been extensively restricted in recent case law.

Digital businesses must also comply with data protection laws and the Telemedia Act. This applies in particular to tracking for advertising purposes, retargeting the analysis of cookies and the use of ‘like’ buttons and Facebook custom audiences. It is common for consumer consent to be obtained in order for data processing to be lawful. In addition, consumers must always be informed of the aims of data processing.

The same laws apply to online and print advertising (eg, copyright, personal and publicity rights or information obligations regarding guarantees under the Civil Code, the Battery Act or the Electrical Act).

The Advertising Council is a self-regulatory body which can intervene when ethical or moral limits are exceeded. However, in practice, competitors and consumer interest groups pursue their claims to ensure that the law is respected.

Definition

How is online advertising defined? Could online editorial content be caught by the rules governing advertising?

There is no standard legal definition of ‘online advertising’. The Act on Unfair Commercial Practices and the EU Misleading and Comparative Advertising Directive (2006/114/EC) define ‘advertising’ as any statement made in the course of trade, business, craft or professional activity to promote the sale of goods or the provision of services.

Under German law, editorial content must be strictly separated from advertising (the ‘separation requirement’). Editorial content differs from advertising by its objective, neutral and truthful character. The benchmark for the assessment of these features is the average consumer. Advertisers must label advertising as such.

Misleading advertising

Are there rules against misleading online advertising?

Misleading advertising is governed by the Unfair Competition Act. Advertising is considered misleading if it contains untrue or misleading information. However, advanced proof confirming advertising statements is required only in court proceedings, which must be subject to high standards. If studies are provided as evidence, they must be carried out and evaluated according to recognised scientific rules and principles.

In some cases, industry-specific regulations exist that are applicable in addition to the Unfair Competition Act. For example, scientific evidence is required under the Therapeutic Products Advertising Act for advertising claims whose alleged therapeutic efficacy is disputed by experts or for advertisers without scientifically substantiated research results.

Restrictions

Are there any products or services that may not be advertised on the internet?

In principle, any products can be offered online. However, various sector or product-specific laws must be observed. Specific rules apply to almost all industries (eg, the tobacco, alcohol, food, electronic product, chemical, cosmetics and textiles industries) and, as a result, businesses looking to sell products online should ensure that their ads comply with such rules.

Hosting liability

What is the liability of content providers and parties that merely host the content, such as ISPs? Can any other parties be liable?

Under Section 7(1) of the Telemedia Act, content providers are responsible for only their own content. Hosting providers are generally not responsible for content and it would be unreasonable to expect them to check all hosted content. However, under Section 10 of the act, once an infringement has been reported, the host provider must block the infringing content and prevent similar infringements.

Website hosting services and other media providers are fully responsible for their own content. They are also responsible for third-party content (eg, user-generated content) and liable for links to illegal content, at least when they become aware that the content is illegal.

Law stated date

Correct on

Give the date on which the information above is accurate.

10 October 2019.