New consumer laws in Germany – What has changed?

There have been several changes to German consumer law lately. This article provides information on the most important innovations affecting B2C business.

Background

The reason for these changes in consumer law are the following EU Directives (each as transposed into German law) and one new genuine German law:

• the Digital Content Directive (“DCD”),
• the Sale of Goods Directive (“SGD”),
• the Omnibus Directive, as well as
• the German Fair Consumer Contracts Act (“FCCA”)

Timeline

1 October 2021

The FCCA now prohibits particular non-assignment-clauses in B2C general terms and conditions.

To Do: Check general terms and conditions for invalid no-assignment clauses.

1 January 2022

The German transposition laws covering the DCD and SGD enter into force.

• Digital content and digital services are legally defined for the first time.
• Digital content and digital services, as well as goods with digital elements are subject to an own new legal regime defining their compliance (“subjective and objective requirements for conformity”), which include (i.a.) the recipients’ reasonable expectation (e.g. as influenced by public statements attributable to the distributing company or demo versions), sufficient installation guidance and information on interoperability and compatibility.
• Companies need to meet new update requirements when providing digital content, digital services or goods with digital elements.
• Personal data can be used as a “currency”.

To Do:

• Identify and categorize offered digital content and services that are subject to the DCD.
• Identify and categorize goods with digital elements that are subject to the SGD.
• Evaluate whether free products or services still are to be considered free of charge or if the “payment with data” concept must be applied.
• Identify update obligations and, if not manageable without third-party input, cover them in relevant agreements with third-party suppliers.
• Establish new contractual guidelines with suppliers to organize proper redress mechanisms in case of warranty claims from consumers.

1 March 2022

The FCCA limits permissibility of auto-renewal of subscriptions for certain types of agreements. Subscriptions can no longer bind consumers for more than two years. Auto-renewals can only extend the subscriptions indefinitely, subject to adding a corresponding notice period of only one month for the consumer.

To Do:

• Assess subscription models and amend, if necessary.
• Revise B2C general terms and conditions accordingly.

28 May 2022

Several provisions transposing the Omnibus Directive into German law are applicable, i.a. rendering particular consumer law infringements subject to fines (similar to GDPR fines).

• Information on and mechanisms allowing for early distinction of consumers’ withdrawal rights need to distinguish between agreements with monetary payment or “payment with data” as well as agreements on digital content or digital services.
• Where consumer ratings are used as an advertising method for products, it must be made clear whether reviews originate from consumers that have actually purchased or used the products and if so, how that is determined.
• Marketplace providers need to inform consumers on whether third-party sellers on the marketplace are consumers or traders.
• When announcing price reductions on physical goods, such announcement need to include the lowest price during the last 30 days.
• Marketplace providers offering the option to search for products from different sellers need to inform consumers on ranking parameters, including if paid advertising or payment specifically for achieving higher ranking of products within search results has influenced the ranking.
• Consumers can bring forth damage claims in connection with unfair business practices affecting them.
• Consumers must be clearly informed when the price offered to them has been personalized on the basis of automated decision-making.

To Do:

• Revise information on withdrawal rights, including (different) mechanisms leading to early extinction of the withdrawal right for digital content or digital services.
• Check handling of consumer ratings for advertisement, if applicable.
• Ensure proper announcements of price reductions for physical goods.
• Marketplaces: Provide new information on third-party sellers.
• Marketplaces: Check ranking parameters.
• Marketplaces: Provide information on the use of personalized pricing methods.

1 July 2022

FCCA requires online businesses to provide a “termination button” on their websites (plus particular landing page) when offering subscription agreements. Failure to (properly) implement this button grants consumers the right to, at any time and without notice, terminate any agreement terminable via such button.

To Do:

• Assess necessity and implement such termination button and landing page.