E-commerce- Germany

New Case Law

German courts have recently issued several judgments concerning particular e-commerce issues with a substantial practical impact on business-to-consumer e-commerce transactions. According to German price regulation law, which is also applicable to online retail offers, the prices displayed must contain all price components, especially value added tax (VAT), and each price must be broken down into its components. Furthermore, a clear indication of whether the customer must pay additional forwarding charges must be given (for further details please see "Recent Court Rulings on E-tailing"). The law also requires that the price (and additional charges) be indicated every time a product is displayed for online retail. A recent decision by the Higher Regional Court Hamburg(1) clarifies that it is not sufficient to state that all displayed prices include VAT in a footer on every webpage of the retail site. This obligation must be strictly applied and each infringement qualifies as an unfair practice which can trigger a lawsuit for breach of German competition law. Such a lawsuit against online retailers can also be initiated by consumer protection organizations in a class action.

New case law provides further guidance regarding the consumer's right to cancel distance contracts, the so-called 'power of revocation' (also addressed in the above update). The customer's right of revocation entitles an online customer to cancel his or her order within two weeks of the date of purchase. If the customer is not properly informed of this right upon purchase, the power of revocation can be executed within one month of the customer receiving the proper information. The Higher Regional Court of Hamburg,(2) the Higher Regional Court of Berlin(3) and the Regional Court of Kleve(4) decided that for online sales, the deadline for revocation must be increased to one month if the customer is not informed in so-called 'textual form' (eg, by email) - the German equivalent of the 'durable medium' requirements in the Distance Selling Directive - about his or her right of revocation prior to or simultaneously with the conclusion of the sales contract. For instance, this often applies to non-auction sales conducted by online retailers on auction platforms such as eBay. These rulings expressly contradict other decisions (eg, of the Regional Court of Flensburg(5) and the Regional Court of Paderborn)(6) and have been heavily criticized. Until the Federal Court of Justice rules on this issue each online retailer should attempt to inform its customers about their right of revocation prior to or simultaneously with the conclusion of the contract. If this proves to be impossible, the customer's attention should be expressly drawn to the extended one-month revocation period by email as soon as possible after the contract has been concluded and ideally by hard copy when the goods are delivered, to make sure that the consumer is notified accordingly.

Email Communications

A recent change in German law (regarding the new electronic commercial register) affects all commercial corporate email communication. It was clarified that every business letter, regardless of its form, must contain specific details about the entity on behalf of which it is sent. Hence, emails also need to contain this information. Cases when an email qualifies as a business letter are still debatable, but in practice all non-private external email communication should be automatically completed with the required information by a server-generated signature. Generally, a business letter of a limited liability corporation or stock corporation needs to specify:

• the company's full name, including the legal form;
• its registered office;
• its Commercial Register and registration number;
• the full names of the members of the executive board; and
• the full name of the chairman of the advisory board (if any).

International Law Office