Germany – To which product category do Cannabidiol spray products belong?

30 November 2024

  • Deutschland
  • Vertrieb
  • Arzneimittelrecht

When selling health-related products, the question frequently arises as to which product category, and therefore which regulatory regime, they fall under. This question often arises when distinguishing between food supplements and medicinal products. But in other constellations, too, difficult questions of demarcation arise, which must be answered with a view to legally compliant marketing.

In a highly interesting case, the Administrative Court (Verwaltungsgericht) of Düsseldorf, Germany, recently had to classify a CBD-containing (Cannabidiol) mouth spray that was explicitly advertised by its manufacturer as a “cosmetic” and therefore not suitable for human consumption. The Ingredients of the product were labelled: « Cannabis sativa seed oil, cannabidiol from cannabis extract, tincture or resin, cannabis sativa leaf extract ».

The Product is additionally also labelled as follows: “Cosmetic oral care spray with hemp leaf extract. » The Instructions for use are: « Spray a maximum of 3 sprays a day into the mouth as desired. Spit out after 30 seconds and do not swallow. »

A spray of the Product contains 10 mg CBD. This results in a maximum daily dose of 30 mg CBD as specified by the company.

At the same time, however, it was pointed out that the “consumption” of a spray shot was harmless to health.

The mouth spray could therefore be consumed like a food, but was declared as a “cosmetic”. This is precisely where the court had to examine whether the prohibition order based on food law was lawful.

For the definition of cosmetic products Article 2 sentence 4 lit. e) Regulation (EC) No. 178/2002 refers to Directive 76/768/EEC. This was replaced by Regulation (EC) No. 1223/2009. Cosmetic products are defined in Article 2(1)(a) as follows: “‘cosmetic product’ means any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours ”.

Here too, it is not the composition of the product that is decisive, but its intended purpose, which is to be determined on the basis of objective criteria according to general public opinion based on concrete evidence.

According to the system of Regulation (EC) No. 178/2002, Article 2 sentence 1 first defines foodstuffs in general and then excludes cosmetic products under sentence 4 lit. e). According to the definition in Regulation (EC) No. 1223/2009, cosmetic products must have an exclusive or at least predominant cosmetic purpose. It can be concluded from this system that the exclusivity or predominance must be positively established. If it is not possible to determine which purpose predominates, the product is a foodstuff.

The Düsseldorf Administrative Court had to deal with this question in the aforementioned legal dispute brought by the distributor against an official prohibition order in the form of a so-called general ruling („Allgemeinverfügung“). By notice dated July 11, 2020, the competent authority issued a general ruling prohibiting the marketing of foodstuffs containing “cannabidiol (as ‘CBD isolates’ or ‘hemp extracts enriched with CBD’)” in their urban area. The company, based in this city, offered the mouth spray described above.

In a ruling dated 25.10.2024 (Courts Ref. : 26 K 2072/23), the court dismissed the company’s claim. The court’s main arguments were :

  1. Classification as food: the CBD spray was correctly classified as food by the authority, as it was reasonable to expect that it could be swallowed despite indications to the contrary. According to an objective perception of the market, there is a now established expectation of an average informed, attentive and reasonable consumer to the effect that CBD oils are intended as “lifestyle” products for oral ingestion, from which consumers hope for positive health effects The labelling as “cosmetic” was refuted by the objective consumer expectations and the nature of the application.
  2. No medicinal product status: Due to the low dosage in this case (max. 30 mg CBD per day), the product was not classified as a functional medicinal product, as there was no sufficiently proven pharmacological effect.
  3. Legal basis of the injunction: The prohibition of the sale of the products by the defendant was based on a general order, which was confirmed as lawful by the court.

In the ruling, the court emphasizes the objective consumer expectation and clarifies that products cannot be exempted from a different regulatory classification by the authorities or the courts solely by their labelling.

Conclusion: The decision presented underlines the considerable importance of the “correct” classification of a health product in the respective legal product category. In addition to the classic distinction between foodstuffs (food supplements) and medicinal products, comparable issues also arise with other product types. In this case in the constellation of cosmetics versus food – combined with the special legal component of the use of CBD.

Laut der EU-Untersuchung des E-Commerce-Sektors liefern über 50 % der Internet-Marktplätze und 36 % der Einzelhändler Daten an Preissuchmaschinen wie Idealo, Google Shopping oder Shopzilla. Demgegenüber unterliegen rund 10 % der Händler einem Verbot von Preisvergleichsmaschinen (siehe Arbeitsdokument der Kommissionsdienststellen SWD(2017) 154 final, S. 32 Abbildung B. 4 und S. 37 Europäische Kommission, Final report on the E-commerce Sector Inquiry, S. 10).

Allerdings hat der Bundesgerichtshof kürzlich ein Verbot von Preisvergleichsmaschinen als wettbewerbswidrig und nichtig bestätigt. Im konkreten Fall hatte Asics Einzelhändlern in Deutschland generell untersagt, Preissuchmaschinen im Online-Vertrieb zu unterstützen:

„Darüber hinaus darf der Vertragshändler nicht … die Funktionalität von Preisvergleichsmaschinen unterstützen, indem er anwendungsspezifische Schnittstellen („APIs“) für diese Preisvergleichsmaschinen bereitstellt.“

Darüber hinaus enthielt die Vereinbarung ein umfassendes Verbot der Werbung auf Plattformen Dritter: Asics untersagte seinen Vertragshändlern, Dritten zu gestatten, die Marken von Asics in irgendeiner Form auf der Website des Dritten zu verwenden, um Kunden auf die Website des Asics-Vertragshändlers zu leiten.

Die Vertriebsvereinbarung von Asics wurde vom Bundeskartellamt zunächst als Pilotverfahren untersucht (ein weiteres Pilotverfahren wurde gegen Adidas eingeleitet, weil sich viele Sporthändler über die Internet-Weiterverkaufsbeschränkungen der Sportartikelhersteller beschwerten). Im Jahr 2015 entschied das Bundeskartellamt, dass das Verbot von Preisvergleichsmaschinen durch Asics kartellrechtswidrig sei, da es gegen Art. 101 Abs. 1 AEUV, § 1 Gesetz gegen Wettbewerbsbeschränkungen (GWB) verstoße.. Begründet wurde dies damit, dass ein solches Verbot in erster Linie darauf abziele, den Preiswettbewerb auf Kosten der Verbraucher zu kontrollieren und einzuschränken. Diese Entscheidung wurde zunächst vom Oberlandesgericht Düsseldorf bestätigt (Beschluss vom 5. April 2017, Az. VI-Kart 13/15 (V), siehe den Legalmondo-Artikel hier).

Nun wurde die Entscheidung vom Bundesgerichtshof bestätigt (Beschluss vom 12. Dezember 2017, Az. KVZ 41/17). Das Asics-Urteil ist besonders bemerkenswert, weil es das erste deutsche Gerichtsurteil nach dem Coty-Urteil des Gerichtshofs der Europäischen Union zu Plattformverboten ist (siehe den Legalmondo-Artikel hier). Es ist daher ein erster Hinweis darauf, wie die Gerichte in Zukunft mit Wiederverkaufsbeschränkungen im Internet umgehen werden.

So stellt der BGH fest, dass das generelle Verbot von Preissuchmaschinen „zumindest“ den passiven Verkauf an Endverbraucher einschränke (Rn. 23, 25) – eine solche Einschränkung sei sogar der beabsichtigte Zweck eines solchen Verbots. Die Zulässigkeit allgemeiner Plattformverbote nach dem Coty-Urteil (siehe hier) impliziere nicht die Zulässigkeit allgemeiner Preisvergleichsverbote (Rn. 28 ff.), so das Gericht. Insbesondere die „Kombination von Beschränkungen“ – d.h. Verbot von Preisvergleichsmaschinen und Werbung auf Drittplattformen – würde den Unterschied ausmachen. Denn sie gewährleiste nicht, dass Interessenten einen „praktisch substanziellen Zugang“ zur Händler-Website erhielten (Rz. 30) – wobei der BGH offen lässt, was für einen solchen „substanziellen Zugang“ ausreicht oder erforderlich ist; in diesem Fall könnten allgemeine Preisvergleichsmaschinenverbote weiterhin zulässig sein.

Praktische Tipps:

  1. Auf EU-Ebene haben weder der Gerichtshof noch die Europäische Kommission zur Gültigkeit von generellen Verboten von Preisvergleichsmaschinen Stellung genommen. Im Vereinigten Königreich hingegen sieht die Competition and Markets Authority die Verbote von Preissuchmaschinen ähnlich kritisch („BMW changes policy on car comparison sites following CMA action„) wie die deutsche Verwaltungspraxis und Rechtsprechung.
  2. In der Praxis dürfte damit nach Ansicht des Bundesgerichtshofs die folgende Differenzierung gelten, die bereits das Oberlandesgericht Düsseldorf (Asics) und das Oberlandesgericht Frankfurt (Deuter) angedeutet haben:
  • Generelle Verbote von Preisvergleichsmaschinen sind – so der Bundesgerichtshof – wettbewerbswidrig und daher grundsätzlich nichtig – sie können aber dennoch zulässig sein, wenn sie nicht mit einem weitreichenden Werbeverbot verbunden sind, so dass Interessenten der Zugang zur Händler-Website gewährleistet ist.
  • Einzelne Preisvergleichsmaschinenverbote und andere mildere Beschränkungen / Kriterien für die Nutzung von Preisvergleichsportalen sind zulässig, etwa hinsichtlich der Produktabbildungen oder -beschreibungen und des Produktumfelds (etwa die Vorgabe, dass Händler nur neue Produkte anbieten dürfen).

Weitere Einzelheiten: Rohrßen, Internetvertrieb: „Nicht Ideal(o)“ – Kombination aus Preissuchmaschinen-Verbot und Logo-Klausel, in: ZVertriebsR 2018, 118 ff.

  1. Darüber hinaus können Hersteller – innerhalb eines Alleinvertriebsnetzes – ihren Händlern aktive Online-Werbung gegenüber Kunden, die dem Hersteller vorbehalten sind oder die der Hersteller einem anderen Händler zugewiesen hat, untersagen und die jeweils zu verwendenden Sprachen festlegen. Grundsätzlich sind auch alle anderen denkbaren Qualitätskriterien zulässig, sofern sie den Kriterien für den Offline-Vertrieb gleichwertig sind (denn „die Kommission betrachtet alle Verpflichtungen, die Vertragshändler davon abhalten, das Internet zu nutzen, um eine größere Anzahl und Vielfalt von Kunden zu erreichen, indem sie Kriterien für den Online-Verkauf aufstellen, die nicht insgesamt den Kriterien für den Verkauf im Ladengeschäft gleichwertig sind, als Kernbeschränkung„, Leitlinien für vertikale Beschränkungen, Rn. 56).

Weitere Informationen finden Sie unter:

  • Überblick über den aktuellen Stand der Praxis inklusive Mustervertragsklauseln: Rohrßen, Vertriebsvorgaben im E-Commerce 2018: Praxisübersichten und Folgen des „Coty“-Urteils des EuGH, in: GRUR-Prax 2018, 39-41 sowie;
  • insbesondere zu Plattformverboten und der möglichen Ausgestaltung von Vertriebsverträgen: Rohrßen, Internetvertrieb von Markenartikeln: Zulässigkeit von Plattformverboten nach dem EuGH-Urteil Coty – Auswirkungen auf Fachhändler- bzw. Selektiv-, Exklusiv-, Franchise- und offene Vertriebsverträge -, in: DB 2018. 300-306.
  1. Zur Zulässigkeit der Verwendung von Marken und Firmenlogos innerhalb einer in eine Internet-Verkaufsplattform eingebetteten Suchfunktion siehe die Pressemitteilung des Bundesgerichtshofs zu seinen beiden ganz aktuellen Entscheidungen vom 15.02.2018 (Az. I ZR 138/16 zu „Ortlieb“ und Az. I ZR 201/16 zu „gofit„).

Der Gerichtshof der Europäischen Union („EuGH„) hat ein neues Urteil zum internationalen Anwendungsbereich der Handelsvertreterrichtlinie (86/653/EWG vom 18. Dezember 1986) gefällt. Die neue Entscheidung steht im Einklang mit den Urteilen

  1. des EuGHs in den Rechtssachen Ingmar (Entscheidung vom 9. November 2000, C-381/98, obligatorischer Ausgleich des Firmenwerts, wenn der Handelsvertreter innerhalb der EU handelt) und Unamar (Entscheidung vom 17. Oktober 2013, C-184/12, zur Frage, ob das nationale Handelsvertreterrecht zwingend ist, wenn der Mindestschutz der Handelsvertreterrichtlinie überschritten wird) und
  2. des Bundesgerichtshofs vom 5. September 2012 (deutsches Handelsvertreterrecht als zwingendes Recht gegenüber Lieferanten in Drittstaaten mit Gerichtsstandsklausel).

Die Frage

Der EuGH hatte nun zu entscheiden, ob ein Handelsvertreter, der in der Türkei für einen in Belgien ansässigen Lieferanten tätig ist, auf der Grundlage der Handelsvertreterrichtlinie einen Anspruch auf Ausgleich des Firmenwerts geltend machen kann. Konkret ging es um die Frage, ob der territoriale Anwendungsbereich der Handelsvertreterrichtlinie gegeben ist, wenn der Handelsvertreter in einem Drittland und der Lieferant innerhalb der EU tätig ist –  der gegensätzliche Fall zur Ingmar-Entscheidung.

Der Sachverhalt

Nach dem Handelsvertretervertrag galt belgisches Recht, und die Gerichte in Gent (Belgien) sollten zuständig sein. Das belgische Recht, das die Richtlinie über Handelsvertreter umsetzt, sieht bei Beendigung des Vertrags einen Anspruch auf eine Entschädigung für den Geschäftswert (und darüber hinaus einen Anspruch auf Schadensersatz) vor. Das vorlegende Gericht vertrat jedoch die Auffassung, dass das belgische Handelsvertretergesetz von 1995 eine Selbstbeschränkung darstellt und gemäß seinem Art. 27 nur dann anwendbar ist, wenn der Handelsvertreter in Belgien tätig war. Andernfalls würde das allgemeine belgische Recht gelten.

Die Entscheidung

Der EuGH entschied, dass die Parteien von der Handelsvertreterrichtlinie abweichen können, wenn der Vertreter in einem Drittland (d. h. außerhalb der EU) tätig ist. Dies war hier der Fall, da der Vertreter in der Türkei tätig war.

Die Entscheidung ist besonders bemerkenswert, weil sie – eher nebenbei – die Ingmar-Entscheidung des EuGH zur Rom I-Verordnung fortschreibt (I.). Darüber hinaus bestätigt sie indirekt §. 92c HGB (II.) – der es den Parteien eines Handelsvertretervertrags nach deutschem Recht ermöglicht, vom allgemein zwingenden Handelsvertreterrecht abzuweichen, wenn der Handelsvertreter außerhalb des Europäischen Wirtschaftsraums („EWR„) tätig ist. Schließlich schafft er Rechtssicherheit für den Vertrieb außerhalb des EWR und zeigt auf, was sich nach einem Brexit für im Vereinigten Königreich tätige Handelsvertreter ändern kann (III.) – wenn die EU und das Vereinigte Königreich keine Übergangsregelungen treffen.

Zu den Einzelheiten siehe den Beitrag von Benedikt Rohrßen, Zeitschrift für Vertriebsrecht 2017, 186 ff. („Ingmar reloaded – Handelsvertreter-Ausgleich bei umgekehrter Ingmar-Konstellation nicht international zwingend„).

Quick Summary: In Germany, on termination of a distribution contract, distribution intermediaries (especially distributors / franchisees) may claim an indemnity from their manufacturer / supplier if their position is similar to that of commercial agents. This is the case if the distribution intermediary is integrated into the supplier’s sales organization and obliged to transfer its customer base to the supplier, i.e. to transmit its customer data, so that the supplier can immediately and without further ado make use of the advantages of the customer base at the end of the contract. A recent court decision now aims at extending the distributor’s right to indemnity also to cases where the supplier in any way benefited from the business relationship with the distributor, even where the distributor did not provide the customer data to the supplier. This article explains the situation and gives tips on how to overcome the ambiguity that this new decision brings with it.

A German court has recently widened the distributor’s right to goodwill indemnity at termination: Suppliers might even have to pay indemnity if the distributor was not obliged to transfer the customer base to the supplier. Instead, any goodwill provided could suffice – understood as substantial benefits the supplier can, after termination, derive from the business relationship with the distributor, regardless of what the parties have stipulated in the distribution agreement.

The decision may impact all businesses where products are sold through distributors (and franchisees, see below) – particularly in retail (especially for electronics, cosmetics, jewelry, and sometimes fashion), car and wholesale trade. Distributors are self-employed, independent contractors who sell and promote the products

  • on a regular basis and in their own name (differently from commercial agents),
  • on their own account (differently from commission agents),
  • thus bearing the sales risk, for which – in return – their margins are rather high.

Under German law, distributors are less protected than commercial agents. However, even distributors and commission agents (see here) are entitled to claim indemnity at termination if two prerequisites are given, namely if the distributor or the commission agent is

  • integrated into the supplier’s sales organization (more than a pure reseller); and
  • obliged (contractually or factually) to forward customer data to the supplier during or at termination of the contract (German Federal Court, 26 November 1997, Case No. VIII ZR 283/96).

Now, the Regional Court of Nuremberg-Fürth has established that the second prerequisite shall already be fulfilled if the distributor has provided the supplier with goodwill:

“… the only decisive factor, in the sense of an analogy, is whether the defendant (the principal) has benefited from the business relationship with the plaintiff (distributor). …

… the principal owes an indemnity if he has a „goodwill“, i.e. a justified profit expectation, from the business relationships with customers created by the distributor.”

(Decision of 27 November 2018, Case no. 2 HK O 10103/12).

To support this wider approach, the court abstractly referred to the opinion by the EU advocate general in the case Marchon/Karaszkiewicz, rendered on 10 September 2015. That case, however, did not concern distributors, but the commercial agent’s entitlement to an indemnity, specifically the concept of “new customers” under the Commercial Agency Directive 86/653/EEC.

In the present case, it would, according to the court, suffice that the supplier had the data on the customers generated by the distributor on his computer and could freely make use of them. Other cases where the distributor indemnity might arise, even regardless of the concrete customer data, would be cases where the supplier takes over the store from the distributor, with the consequence of customers continuing to visit the very store also after the distributor has left.

Practical tips:

1. The decision makes the legal situation with distributors / franchisees less clear. The court’s wider approach needs, however, to be seen in the light of the Federal Court’s case law: The court still in 2015 denied a distributor the indemnity, arguing that the second prerequisite was missing, i.e. that the distributor was not obliged to forward the customer data (decision of 5 February 2015, case no. VII ZR 315/13, following its earlier decision re Toyota, 17 April 1996, case no. VIII ZR 5/95). Moreover, the Federal Court also denied franchisees the right to indemnity where the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (decision of 5 February 2015, case no. VII ZR 109/13 re bakery chain “Kamps”). It remains to be seen how the case law develops.

2. In any case, suppliers should, before entering the German market, consider whether they are willing to take that risk of having to pay indemnity at termination.

3. The same applies to franchisors: franchisees will likely be able to claim indemnity based on analogue application of commercial agency law. Until today, the German Federal Court of Justice has denied the franchisee’s indemnity claim in the single case and therefore left open whether franchisees in general could claim such indemnity (e.g. decision of 23 July 1997, case no. VIII ZR 134/96 re Benetton stores). Nevertheless, German courts could quite likely affirm the claim in the case of distribution franchising (where the franchisee buys the products from the franchisor), provided the situation is similar to distributorship and commercial agency. This could be the case where the franchisee has been entrusted with the distribution of the franchisor’s products and the franchisor alone is entitled, after termination of contract, to access the customers newly acquired by the franchisee during the contract (cf. German Federal Court, decision of 29 April 2010, Case No. I ZR 3/09, Joop). No indemnity, however, can be claimed where

  • the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (decision of 5 February 2015 re the bakery chain “Kamps”);
  • or production franchising (bottling contracts, etc.) where the franchisor or licensor is not active in the very sector of products distributed by the franchisee / licensee (decision of 29 April 2010, Case No. I ZR 3/09, Joop).

4. The German indemnity for distributors – or potentially for franchisees – can still be avoided by:

  • choosing another law that does not provide for an indemnity;
  • obliging the supplier to block, stop using and, if necessary, delete such customer data at termination (German Federal Court, decision of 5 February 2015, case no. VII ZR 315/13: “Subject to the provisions set out in Section [●] below, the supplier shall block the data provided by the distributor after termination of the distributor’s participation in the customer service, cease their use and delete them upon the distributor’s request.„). Though such contractual provision appears to be irrelevant according to the above decision by the Court of Nuremberg, the court does not provide any argument why the established Federal Court’s case law should not apply any more;
  • explicitly contracting the indemnity out, which, however, may work only if (i) the distributor acts outside the EEA and (ii) there is no mandatory local law providing for such indemnity (see the article here).

5. Further, if the supplier deliberately accepts to pay the indemnity in return for a solid customer base with perhaps highly usable data (in compliance with the EU General Data Protection Regulation), the supplier can agree with the distributor on “entry fees” to mitigate the obligation. The payment of such entry fees or contract fees could be deferred until termination and then offset against the distributor’s claim for indemnity.

6. The distributor’s goodwill indemnity is calculated on basis of the margins made with new customers brought by the distributor or with existing customers where the distributor has significantly increased the business. The exact calculation can be quite sophisticated and German courts apply different calculation methods. In total, it may amount up to the past years’ average annual margin the distributor made with such customers.

The legal form of a GmbH (limited liability company) is very popular in Germany and is also one of the most frequently chosen forms of market entry for foreign investors. Its establishment is relatively simple and quick, the GmbH offers shareholders the desired limitation of liability and enjoys a high reputation in business relations, both in Germany and abroad. The statutory minimum share capital of 25,000 euros documents a certain seriousness and is intended to protect creditors.

However, the opening of a German bank account to which the shareholders are to pay their capital contributions is usually a factual problem when setting up a GmbH; the capital stock must be provided before the company is registered in the German commercial register. On the one hand, it is not uncommon for German financial institutions to refuse to open accounts to foreign shareholders per se. On the other hand, it is almost standard today that the opening of a bank account for a new company in which foreign shareholders are to hold shares can take several weeks for various internal bank reasons. In practice, this means that the entry of the company in the commercial register can be suspended for several weeks or even months. Valuable time is lost, especially if you are about to start a project in Germany and everything is already prepared.

Do you have to accept this unnecessary delay? No, not at all.

There is a much faster and more acceptable way.

A bank account is not required for the establishment of a GmbH. The German corporate law does not provide for this either. In practice, however, it has become common to open an account directly when a company is established. Of course, this only makes sense if the account is opened quickly and immediately. If, however, it is foreseeable in advance that there might be problems opening an account with a German bank, a different procedure is recommended.

The managing director of the newly established GmbH (he is usually already appointed during the notarial establishment of the company) has to assure in the registration of the new company to the commercial register that the capital contributions are in the free and unrestricted disposal of the management. The law does not stipulate that this can only take place if the payment is made to a bank account of the GmbH. It is also possible and permissible for the managing director to opens a company cash box (cash register) in which the shareholders hand over the capital contributions in cash and the managing director notes the payment in the cash book. A copy of the cash book or a confirmation of the managing director can be handed over to the notary as proof of the payment, who then also forwards this copy to the commercial register.

In the incorporation practice and experience of the author, this procedure has so far been accepted by the commercial registers without objection. All GmbHs founded in this way were successfully registered.

The author of this post is Dominik Wagner.

To create a homogeneous franchise system where all franchisees have to comply with the same requirements, franchisors typically use standard form franchise contracts – i.e. contracts pre-formulated drafted and provided by the franchisor for a multiple number of franchisees.

Within Germany, such franchise contracts have to comply with the quite strict German laws on standard form contracts (even in B2B). As a rule of thumb, such standard form contracts must be reasonable in order to be valid. Vice versa, they are void if they unreasonably disadvantage the franchisee, especially if

  • they are not compatible with essential principles of law, or
  • restrict essential rights or duties arising from the nature of the franchise contract to such an extent that the contractual purpose is endangered.

The same goes for handbooks, guidelines or other manuals: they all qualify as standard form contracts under German law (sec. 305 (1) German Civil Code [“BGB”]).

Moreover, franchise contracts must not excessively restrict the franchisee’s economic freedom. Worst case risk – as recently reconfirmed by the Federal Court –: the entire franchise contract is void!

“A franchise agreement is null and void in its entirety because of infringing sec. 138 BGB if the franchisee’s economic freedom is excessively impaired due to a large number of provisions which advantage the franchisor unilaterally and disadvantage the franchisee, for which no even approximately appropriate compensation is granted to the franchisee (…). This requires an overall assessment of the contractual agreement and the circumstances leading to the conclusion of the contract. Indications of an immoral gagging of the franchisee may be a provision with stipulates the franchisor’s authority to collect debts, thus enabling the franchisor to redirect payments to the franchisor, as well as contractual provisions restricting the franchisee’s economic freedom beyond what is typical for such a distribution system.”

(Decision of 11.10.2018, Case No. VII ZR 298/17, para. 17 [own translation] – regarding a “licensing contract” for realtors).

Practical advice

  1. This new decision by the Federal Court confirms the rather restrictive, rather franchisee-friendly decisions handed down by German courts in the past (e.g. the Federal Court’s Decision on fast food chains of 12.11.1986, Case No. VIII ZR 280/85, para. 10).
  2. To minimize the risk of invalidity, franchisors ideally observe the relevant statutory requirements on standard form contracts and the relevant case law on franchise contracts. According to the latest decision above, special care should be taken when the franchise contract provides for the franchisor’s power to collect debts. A way out could be the choice of another law – if the franchisor is based outside Germany (cf. Art. 3 Rome-I-Regulation).
  3. For guidance on franchisors’ advertising and pricing campaigns and compliance with antitrust law, check out the article “Franchise systems: ad campaigns with low prices can come costly!”.

Franchisors may run ad campaigns with low prices. Such campaigns, however, can come costly if they have an anticompetitive effect, especially if they factually force the franchisees to offer the products for the low prices.

Best example: pricing campaigns for the “burger of the week”, as decided by the Munich Regional Court in its decision of 26 October 2018 (Case No. 37 O 10335/15).

The situation

The plaintiffs are franchisees of the defendant’s franchise network, a restaurant chain. In addition to the obligation to pay „royalties“ in return for the use of the franchise systems and its trade marks (5%), the franchise agreements also obliged the franchisees to pay a sales-related advertising fee. The defendant and franchisor used the advertising fees of the franchisees, among others, to advertise products from the plaintiffs‘ menu at low prices, e.g. under the slogan „King of the Month„. By participating in the advertising campaigns and its low prices, the sales of the franchisees increased and thus the franchise fee they had to pay. After some time, the franchisees decided that this advertising campaign caused them financial damage – because the products offered for a low price affected the sale of products offered at a normal price (“cannibalism effect”). They no longer participated in the campaign and demanded an appropriate reduction of their advertising fee. Among other things, they brought an action for an injunction against the use of the advertising fee for the campaign complained of and for a declaratory judgment of the liability to pay damages. The Regional Court granted both motions.

The main reason. The advertising campaigns had the effect of restricting competition, namely the franchisees’ ability to determine their sale prices (contrary to sec. 1 and 2 (2) German Act against Restraints of Competition and Art. 2 (1), Art. 4 a) Vertical Block Exemption Regulation). After all, the franchisor set – so the court – the resale price through the de facto binding effect of the ad campaign.

The decision stands in line with the previous case law, especially of the German Federal Court’s decisions on low-price campaigns by franchisors of

  • self-drive rental vehicles (“Sixt ./. Budget”, 02.02.1999, Case No. KZR 11/97, para.30),
  • pet food (“Fressnapf”, 04.02.2016, Case No. I ZR 194/14, para. 14), and
  • glasses within a dual distribution system where the franchisor sold the products through its own branches and through franchisees without differentiating between branch and franchise operations (“Apollo Optik”, 20.05.2003, Case No. KZR 27/02, para. 37).

Practical tips

  1. Obligations that are essential for running the franchise system do not restrict competition for the purposes of the EU antitrust rules (similar to the US law’s “ancillary restraints doctrine”). In particular, the following restrictions are typically indispensable components of a functioning franchise agreement:
  • Restrictions of the transfer of know-how;
  • Non-compete obligations (during and after the term of the agreement), prohibiting the franchisee from opening a shop of the same or similar nature in an area where he may compete with other members of the franchise network;
  • Obligations of the franchisee not to transfer his shop without the franchisor’s prior approval.

(cf. EU Court of Justice, 28.01.1986, Case “Pronuptia”, Case No. 161/84 para. 16. 17).

  1. However, franchise systems are not per se exempted from the prohibition of restricting competition. Therefore, watch out to comply with the EU antitrust rules to avoid painful fines and ensure that the franchise agreement can be enforced.
  2. The prohibition of price-fixing (or Resale Price Maintenance) applies to the relationship between franchisor and franchisee if the franchisee bears the economic risk of its enterprise. To avoid that an ad campaign with recommended resale prices constitutes an anticompetitive price-fixing, the concrete situation needs to be assessed thoroughly. What helps to avoid also any factual binding effect:
  • Add a clarifying note: “Only at participating restaurants in … . As long as stocks last.”
  • Ensure that such note is clearly visible, e.g. by adding an asterisk “*” to the price.
  • Avoid any measures that could be interpreted as pressure or incentive for the franchisees and which would turn the recommended price into a fixed price (e.g. because other pricing would otherwise lead to negative evaluations).
  1. Such ad campaigns may work, as a UK court’s decision shows: According to the BBC, Burger King franchisees sued the franchisor in 2009 “because a corporate promotion required franchisees to sell a double cheeseburger for $1 that cost a $1.10 to make. The court ruled for Burger King.” Under the above circumstances and also for short-term promotions, franchisors may even impose the resale price – such campaigns just need to be well prepared.
  2. For an overview on resale price maintenance, see the Legalmondo article Resale Price Maintenance and Exceptions for short-term promotions.
  3. Resale Price Maintenance can come costly – in 2018, the European Commission imposed fines of EUR 111 million in total on four consumer electronics manufacturers – Asus, Denon & Marantz, Philips and Pioneer – for fixing online resale prices (cf. the Press release of 24 July2018).

“Luxury goods justify online sales bans” on third party platforms – as stated in the press release no. 30/2018 of the Higher Regional Court of Frankfurt of July 12, 2018. After the long-awaited Coty-ruling of the ECJ (see the article of December 2017, https://www.legalmondo.com/2017/12/eu-court-justice-allows-online-sales-restrictions-coty-case/), the Higher Regional Court of Frankfurt has now applied the ECJ’s guidelines to Coty’s ban of sales via third party platforms and declared it effective – which was actually expected (I). Other high-quality goods – also outside the luxury segment – can justify platforms bans as well – at least this was decided by the Court of Appeal of Hamburg with regard to an eBay ban (II.). The article ends with some practical conclusions (III.).

Luxury products justify platform bans

According to the judgment of the Frankfurt Court of Appeal, Coty can prohibit the distributor from selling its products via third party platforms. Based on Coty’s wording in the selective distribution agreement, however, any distributor is free to establish advertising cooperations with third party platforms, where customers are redirected to the distributor’s own online shop. According to the judgment, the online marketplace ban is already admissible under the EU Vertical Block Exemption Regulation, since it does not constitute a hardcore restriction. The distribution ban could possibly even be exempted from the cartel prohibition, in the field of selective distribution; in this case, it would only be doubtful whether the prohibition of all „sales cooperation with a third party platform, outwardly recognisable from others, regardless of its concrete structure, would be a reasonable mean for the intended aim“ (translated text from the original German version), i.e. whether it would be proportionate or whether there would be other means, less interfering with the dealer’s competitiveness. This question was left open by the Court.

Also other high-quality goods may allow platform bans

The case decided by the Hamburg Higher Regional Court (decision of March 22, 2018, file no. 3 U 250/16) concerns a qualitative selective distribution system for food supplements and cosmetics, which runs via the so-called network marketing, as well as via internet. The distribution guidelines contain, among other things, specific indications regarding the distributor’s website, the contact possibilities for customers in accordance with the „principle of personal sales of goods“ (since the distribution system aims to sell the product tailored to the customers’ personal needs based on personal advice), as well as the quality of information and the product presentation. The „distribution … via eBay and comparable e-commerce platforms“ is expressly prohibited, as it does not meet the quality requirements, at least not „according to the current state“ (translated text from the original German version).

The Court of First Instance considered the platform ban to be admissible (District Court of Hamburg, judgment of November 4, 2016, Case No. 315 O 396/15) – which has now been confirmed by the Higher Regional Court of Hamburg. This is because qualitative selective distribution systems are not only admissible for luxury goods and high-technology goods, but also for (other) high-quality goods, „if the goods sold are high-quality and the distribution is combined with parallel customer consulting and support services, with the aim, among other things, of illustrating to the customer an overall sophisticated, high-quality and upscale end product and building up or maintaining a specific product image“ (translated text from the original German version).

Within such a selective distribution system for the distribution of food supplements and cosmetics, it could then be admissible “to prohibit the distribution partners, by means of suitable company guidelines, from selling those goods via a specific online sales platform, in order to preserve the product image and the related practice of customer-binding support, as well as to prevent product- and image-damaging business practices of single distribution partners as occurred and consequently pursued in the past” (translated text from the original German version).

The peculiarity here was that they were not „pure prestige products“ and, moreover, the Hamburg Higher Regional Court did not limit itself to the – in view of the market shares readily feasible – verification that the platform under Article 2 of the Vertical Block Exemption Regulation was admissible. Rather, the Court vividly and precisely declined the so-called Metro criteria.

Practical conclusions

  1. The Internet remains a growth driver for consumer goods, as also the market data from the German Trade Association confirm: „E-commerce remains a growth driver„.
  2. At the same time, brand manufacturers in particular want growth to be regulated according to the rules of their distribution system and to their requirements. These include, especially for luxury and technically sophisticated products, as well as other products requiring intensive assistance, strict specifications regarding brand identity and advertising appearance (specifications regarding brick store clauses, marketplace bans) and the services to be offered (e.g. chat and / or hotline with information on availability).
  3. Manufacturers should check whether their platform bans comply with ECJ’s requirements or if they wish to impose platform bans – in selective, exclusive, franchise and open distribution.
  4. Who wants to take as little risk as possible, should remain cautious with platform bans outside the selective distribution of luxury goods. In its first reaction, also the Federal Cartel Authority (BKartA, short for “Bundeskartellamt”) declared that the Coty-ruling should apply exclusively to original luxury products: “#Brand manufacturers still have no carte blanche on #platform bans. First assessment: „Limited impact on our practice“ (BKartA on Twitter, December 6, 2017). Nevertheless, the European Commission has now spoken against this: in its Competition Policy Brief of April 2018 („EU competition rules and marketplace bans: Where do we stand after the Coty judgment?), the European Commission states – rather incidentally – that the argumentation of the ECJ in the Coty case should also apply regardless of the luxury character of the distributed products:

„The arguments provided by the Court are valid irrespective of the product category concerned (i.e. luxury goods in the case at hand) and are equally applicable to non-luxury products. Whether a platform ban has the object of restricting the territory into which, or the customers to whom the distributor can sell the products or whether it limits the distributor’s passive sales can logically not depend on the nature of the product concerned.“

In fact, the ECJ has broadly defined „luxury goods“ in its judgment: namely as goods whose quality is „not just the result of their material characteristics“ but of intangible values – which is usually the case for branded goods (see the Coty-judgment of the ECJ of December 6, 2017, para. 25 and, with regard to „quality goods“, the conclusion of the EU Advocate General of July 26, 2017, para. 92). Furthermore, the ECJ only requests that the goods be bought „also“ because of their prestige character, not „alone“ or „above all“ because of it. In conclusion, a lot of aspects suggest that all brand manufacturers can include platform bans in their distribution agreements – at least in case of market shares up to max. 30%.

  1. Those who are not afraid of confrontations with dealers and antitrust authorities can definitely impose platform bans outside the selective distribution of luxury goods as well – or increasingly rely on premium products and luxury – such as at the perfumery chain Douglas (see the Süddeutsche Zeitung of March 8, 2018, p. 15: „Active and unconventional, Tina Müller ends discounts on Douglas and aims at luxury„).
  2. To ensure consistent quality of sales, specific quality targets are recommended, especially for online sales. The list of possible quality targets is very long. The specifications that have proven to be best practice concern in particular:

– the positioning as a retailer (platform, product range, communication)

– the design of the website (quality, look & feel, etc.)

– the content and product offer of the website,

– the processing of online purchases,

– the consulting and customer service, as well as

– the advertisement.

  1. It is also essential to note that manufacturers are not allowed to totally prohibit distributors from selling online; nor are sales requirements allowed to amount to such a total ban – as the Courts now see in the case of Ascis‘ ban of price comparison engines (to this regard, see the following article from April 2018: https://www.legalmondo.com/2018/04/germany-ban-of-price-comparison-engines-and-advertising-on-third-party-platforms/).
  2. Further details can be found in German in the following Law Journals:

– Rohrßen, Vertriebsvorgaben im E-Commerce 2018: Praxisüberblick und Folgen des „Coty“-Urteils des EuGH, in: GRUR-Prax 2018, 39-41;

– Rohrßen, Internetvertrieb von Markenartikeln: Zulässigkeit von Plattform-verboten nach dem EuGH-Urteil Coty, in: DB 2018, 300-306;

– Rohrßen, Internetvertrieb: „Nicht Ideal(o)“ – Kombination aus Preissuchma-schinen-Verbot und Logo-Klausel, in: ZVertriebsR 2018, 120-123;

– Rohrßen, Internetvertrieb nach Coty – Von Markenware, Beauty und Luxus: Plattformverbote, Preisvergleichsmaschinen und Geoblocking, in: ZVertriebsR 2018, 277-285.

Matthia Hesshaus

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    Deutschland – Verbot von Preisvergleichsmaschinen und Werbung auf Plattformen Dritter

    10 Oktober 2022

    • Deutschland
    • e-Commerce
    • Vertrieb

    When selling health-related products, the question frequently arises as to which product category, and therefore which regulatory regime, they fall under. This question often arises when distinguishing between food supplements and medicinal products. But in other constellations, too, difficult questions of demarcation arise, which must be answered with a view to legally compliant marketing.

    In a highly interesting case, the Administrative Court (Verwaltungsgericht) of Düsseldorf, Germany, recently had to classify a CBD-containing (Cannabidiol) mouth spray that was explicitly advertised by its manufacturer as a “cosmetic” and therefore not suitable for human consumption. The Ingredients of the product were labelled: « Cannabis sativa seed oil, cannabidiol from cannabis extract, tincture or resin, cannabis sativa leaf extract ».

    The Product is additionally also labelled as follows: “Cosmetic oral care spray with hemp leaf extract. » The Instructions for use are: « Spray a maximum of 3 sprays a day into the mouth as desired. Spit out after 30 seconds and do not swallow. »

    A spray of the Product contains 10 mg CBD. This results in a maximum daily dose of 30 mg CBD as specified by the company.

    At the same time, however, it was pointed out that the “consumption” of a spray shot was harmless to health.

    The mouth spray could therefore be consumed like a food, but was declared as a “cosmetic”. This is precisely where the court had to examine whether the prohibition order based on food law was lawful.

    For the definition of cosmetic products Article 2 sentence 4 lit. e) Regulation (EC) No. 178/2002 refers to Directive 76/768/EEC. This was replaced by Regulation (EC) No. 1223/2009. Cosmetic products are defined in Article 2(1)(a) as follows: “‘cosmetic product’ means any substance or mixture intended to be placed in contact with the external parts of the human body (epidermis, hair system, nails, lips and external genital organs) or with the teeth and the mucous membranes of the oral cavity with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance, protecting them, keeping them in good condition or correcting body odours ”.

    Here too, it is not the composition of the product that is decisive, but its intended purpose, which is to be determined on the basis of objective criteria according to general public opinion based on concrete evidence.

    According to the system of Regulation (EC) No. 178/2002, Article 2 sentence 1 first defines foodstuffs in general and then excludes cosmetic products under sentence 4 lit. e). According to the definition in Regulation (EC) No. 1223/2009, cosmetic products must have an exclusive or at least predominant cosmetic purpose. It can be concluded from this system that the exclusivity or predominance must be positively established. If it is not possible to determine which purpose predominates, the product is a foodstuff.

    The Düsseldorf Administrative Court had to deal with this question in the aforementioned legal dispute brought by the distributor against an official prohibition order in the form of a so-called general ruling („Allgemeinverfügung“). By notice dated July 11, 2020, the competent authority issued a general ruling prohibiting the marketing of foodstuffs containing “cannabidiol (as ‘CBD isolates’ or ‘hemp extracts enriched with CBD’)” in their urban area. The company, based in this city, offered the mouth spray described above.

    In a ruling dated 25.10.2024 (Courts Ref. : 26 K 2072/23), the court dismissed the company’s claim. The court’s main arguments were :

    1. Classification as food: the CBD spray was correctly classified as food by the authority, as it was reasonable to expect that it could be swallowed despite indications to the contrary. According to an objective perception of the market, there is a now established expectation of an average informed, attentive and reasonable consumer to the effect that CBD oils are intended as “lifestyle” products for oral ingestion, from which consumers hope for positive health effects The labelling as “cosmetic” was refuted by the objective consumer expectations and the nature of the application.
    2. No medicinal product status: Due to the low dosage in this case (max. 30 mg CBD per day), the product was not classified as a functional medicinal product, as there was no sufficiently proven pharmacological effect.
    3. Legal basis of the injunction: The prohibition of the sale of the products by the defendant was based on a general order, which was confirmed as lawful by the court.

    In the ruling, the court emphasizes the objective consumer expectation and clarifies that products cannot be exempted from a different regulatory classification by the authorities or the courts solely by their labelling.

    Conclusion: The decision presented underlines the considerable importance of the “correct” classification of a health product in the respective legal product category. In addition to the classic distinction between foodstuffs (food supplements) and medicinal products, comparable issues also arise with other product types. In this case in the constellation of cosmetics versus food – combined with the special legal component of the use of CBD.

    Laut der EU-Untersuchung des E-Commerce-Sektors liefern über 50 % der Internet-Marktplätze und 36 % der Einzelhändler Daten an Preissuchmaschinen wie Idealo, Google Shopping oder Shopzilla. Demgegenüber unterliegen rund 10 % der Händler einem Verbot von Preisvergleichsmaschinen (siehe Arbeitsdokument der Kommissionsdienststellen SWD(2017) 154 final, S. 32 Abbildung B. 4 und S. 37 Europäische Kommission, Final report on the E-commerce Sector Inquiry, S. 10).

    Allerdings hat der Bundesgerichtshof kürzlich ein Verbot von Preisvergleichsmaschinen als wettbewerbswidrig und nichtig bestätigt. Im konkreten Fall hatte Asics Einzelhändlern in Deutschland generell untersagt, Preissuchmaschinen im Online-Vertrieb zu unterstützen:

    „Darüber hinaus darf der Vertragshändler nicht … die Funktionalität von Preisvergleichsmaschinen unterstützen, indem er anwendungsspezifische Schnittstellen („APIs“) für diese Preisvergleichsmaschinen bereitstellt.“

    Darüber hinaus enthielt die Vereinbarung ein umfassendes Verbot der Werbung auf Plattformen Dritter: Asics untersagte seinen Vertragshändlern, Dritten zu gestatten, die Marken von Asics in irgendeiner Form auf der Website des Dritten zu verwenden, um Kunden auf die Website des Asics-Vertragshändlers zu leiten.

    Die Vertriebsvereinbarung von Asics wurde vom Bundeskartellamt zunächst als Pilotverfahren untersucht (ein weiteres Pilotverfahren wurde gegen Adidas eingeleitet, weil sich viele Sporthändler über die Internet-Weiterverkaufsbeschränkungen der Sportartikelhersteller beschwerten). Im Jahr 2015 entschied das Bundeskartellamt, dass das Verbot von Preisvergleichsmaschinen durch Asics kartellrechtswidrig sei, da es gegen Art. 101 Abs. 1 AEUV, § 1 Gesetz gegen Wettbewerbsbeschränkungen (GWB) verstoße.. Begründet wurde dies damit, dass ein solches Verbot in erster Linie darauf abziele, den Preiswettbewerb auf Kosten der Verbraucher zu kontrollieren und einzuschränken. Diese Entscheidung wurde zunächst vom Oberlandesgericht Düsseldorf bestätigt (Beschluss vom 5. April 2017, Az. VI-Kart 13/15 (V), siehe den Legalmondo-Artikel hier).

    Nun wurde die Entscheidung vom Bundesgerichtshof bestätigt (Beschluss vom 12. Dezember 2017, Az. KVZ 41/17). Das Asics-Urteil ist besonders bemerkenswert, weil es das erste deutsche Gerichtsurteil nach dem Coty-Urteil des Gerichtshofs der Europäischen Union zu Plattformverboten ist (siehe den Legalmondo-Artikel hier). Es ist daher ein erster Hinweis darauf, wie die Gerichte in Zukunft mit Wiederverkaufsbeschränkungen im Internet umgehen werden.

    So stellt der BGH fest, dass das generelle Verbot von Preissuchmaschinen „zumindest“ den passiven Verkauf an Endverbraucher einschränke (Rn. 23, 25) – eine solche Einschränkung sei sogar der beabsichtigte Zweck eines solchen Verbots. Die Zulässigkeit allgemeiner Plattformverbote nach dem Coty-Urteil (siehe hier) impliziere nicht die Zulässigkeit allgemeiner Preisvergleichsverbote (Rn. 28 ff.), so das Gericht. Insbesondere die „Kombination von Beschränkungen“ – d.h. Verbot von Preisvergleichsmaschinen und Werbung auf Drittplattformen – würde den Unterschied ausmachen. Denn sie gewährleiste nicht, dass Interessenten einen „praktisch substanziellen Zugang“ zur Händler-Website erhielten (Rz. 30) – wobei der BGH offen lässt, was für einen solchen „substanziellen Zugang“ ausreicht oder erforderlich ist; in diesem Fall könnten allgemeine Preisvergleichsmaschinenverbote weiterhin zulässig sein.

    Praktische Tipps:

    1. Auf EU-Ebene haben weder der Gerichtshof noch die Europäische Kommission zur Gültigkeit von generellen Verboten von Preisvergleichsmaschinen Stellung genommen. Im Vereinigten Königreich hingegen sieht die Competition and Markets Authority die Verbote von Preissuchmaschinen ähnlich kritisch („BMW changes policy on car comparison sites following CMA action„) wie die deutsche Verwaltungspraxis und Rechtsprechung.
    2. In der Praxis dürfte damit nach Ansicht des Bundesgerichtshofs die folgende Differenzierung gelten, die bereits das Oberlandesgericht Düsseldorf (Asics) und das Oberlandesgericht Frankfurt (Deuter) angedeutet haben:
    • Generelle Verbote von Preisvergleichsmaschinen sind – so der Bundesgerichtshof – wettbewerbswidrig und daher grundsätzlich nichtig – sie können aber dennoch zulässig sein, wenn sie nicht mit einem weitreichenden Werbeverbot verbunden sind, so dass Interessenten der Zugang zur Händler-Website gewährleistet ist.
    • Einzelne Preisvergleichsmaschinenverbote und andere mildere Beschränkungen / Kriterien für die Nutzung von Preisvergleichsportalen sind zulässig, etwa hinsichtlich der Produktabbildungen oder -beschreibungen und des Produktumfelds (etwa die Vorgabe, dass Händler nur neue Produkte anbieten dürfen).

    Weitere Einzelheiten: Rohrßen, Internetvertrieb: „Nicht Ideal(o)“ – Kombination aus Preissuchmaschinen-Verbot und Logo-Klausel, in: ZVertriebsR 2018, 118 ff.

    1. Darüber hinaus können Hersteller – innerhalb eines Alleinvertriebsnetzes – ihren Händlern aktive Online-Werbung gegenüber Kunden, die dem Hersteller vorbehalten sind oder die der Hersteller einem anderen Händler zugewiesen hat, untersagen und die jeweils zu verwendenden Sprachen festlegen. Grundsätzlich sind auch alle anderen denkbaren Qualitätskriterien zulässig, sofern sie den Kriterien für den Offline-Vertrieb gleichwertig sind (denn „die Kommission betrachtet alle Verpflichtungen, die Vertragshändler davon abhalten, das Internet zu nutzen, um eine größere Anzahl und Vielfalt von Kunden zu erreichen, indem sie Kriterien für den Online-Verkauf aufstellen, die nicht insgesamt den Kriterien für den Verkauf im Ladengeschäft gleichwertig sind, als Kernbeschränkung„, Leitlinien für vertikale Beschränkungen, Rn. 56).

    Weitere Informationen finden Sie unter:

    • Überblick über den aktuellen Stand der Praxis inklusive Mustervertragsklauseln: Rohrßen, Vertriebsvorgaben im E-Commerce 2018: Praxisübersichten und Folgen des „Coty“-Urteils des EuGH, in: GRUR-Prax 2018, 39-41 sowie;
    • insbesondere zu Plattformverboten und der möglichen Ausgestaltung von Vertriebsverträgen: Rohrßen, Internetvertrieb von Markenartikeln: Zulässigkeit von Plattformverboten nach dem EuGH-Urteil Coty – Auswirkungen auf Fachhändler- bzw. Selektiv-, Exklusiv-, Franchise- und offene Vertriebsverträge -, in: DB 2018. 300-306.
    1. Zur Zulässigkeit der Verwendung von Marken und Firmenlogos innerhalb einer in eine Internet-Verkaufsplattform eingebetteten Suchfunktion siehe die Pressemitteilung des Bundesgerichtshofs zu seinen beiden ganz aktuellen Entscheidungen vom 15.02.2018 (Az. I ZR 138/16 zu „Ortlieb“ und Az. I ZR 201/16 zu „gofit„).

    Der Gerichtshof der Europäischen Union („EuGH„) hat ein neues Urteil zum internationalen Anwendungsbereich der Handelsvertreterrichtlinie (86/653/EWG vom 18. Dezember 1986) gefällt. Die neue Entscheidung steht im Einklang mit den Urteilen

    1. des EuGHs in den Rechtssachen Ingmar (Entscheidung vom 9. November 2000, C-381/98, obligatorischer Ausgleich des Firmenwerts, wenn der Handelsvertreter innerhalb der EU handelt) und Unamar (Entscheidung vom 17. Oktober 2013, C-184/12, zur Frage, ob das nationale Handelsvertreterrecht zwingend ist, wenn der Mindestschutz der Handelsvertreterrichtlinie überschritten wird) und
    2. des Bundesgerichtshofs vom 5. September 2012 (deutsches Handelsvertreterrecht als zwingendes Recht gegenüber Lieferanten in Drittstaaten mit Gerichtsstandsklausel).

    Die Frage

    Der EuGH hatte nun zu entscheiden, ob ein Handelsvertreter, der in der Türkei für einen in Belgien ansässigen Lieferanten tätig ist, auf der Grundlage der Handelsvertreterrichtlinie einen Anspruch auf Ausgleich des Firmenwerts geltend machen kann. Konkret ging es um die Frage, ob der territoriale Anwendungsbereich der Handelsvertreterrichtlinie gegeben ist, wenn der Handelsvertreter in einem Drittland und der Lieferant innerhalb der EU tätig ist –  der gegensätzliche Fall zur Ingmar-Entscheidung.

    Der Sachverhalt

    Nach dem Handelsvertretervertrag galt belgisches Recht, und die Gerichte in Gent (Belgien) sollten zuständig sein. Das belgische Recht, das die Richtlinie über Handelsvertreter umsetzt, sieht bei Beendigung des Vertrags einen Anspruch auf eine Entschädigung für den Geschäftswert (und darüber hinaus einen Anspruch auf Schadensersatz) vor. Das vorlegende Gericht vertrat jedoch die Auffassung, dass das belgische Handelsvertretergesetz von 1995 eine Selbstbeschränkung darstellt und gemäß seinem Art. 27 nur dann anwendbar ist, wenn der Handelsvertreter in Belgien tätig war. Andernfalls würde das allgemeine belgische Recht gelten.

    Die Entscheidung

    Der EuGH entschied, dass die Parteien von der Handelsvertreterrichtlinie abweichen können, wenn der Vertreter in einem Drittland (d. h. außerhalb der EU) tätig ist. Dies war hier der Fall, da der Vertreter in der Türkei tätig war.

    Die Entscheidung ist besonders bemerkenswert, weil sie – eher nebenbei – die Ingmar-Entscheidung des EuGH zur Rom I-Verordnung fortschreibt (I.). Darüber hinaus bestätigt sie indirekt §. 92c HGB (II.) – der es den Parteien eines Handelsvertretervertrags nach deutschem Recht ermöglicht, vom allgemein zwingenden Handelsvertreterrecht abzuweichen, wenn der Handelsvertreter außerhalb des Europäischen Wirtschaftsraums („EWR„) tätig ist. Schließlich schafft er Rechtssicherheit für den Vertrieb außerhalb des EWR und zeigt auf, was sich nach einem Brexit für im Vereinigten Königreich tätige Handelsvertreter ändern kann (III.) – wenn die EU und das Vereinigte Königreich keine Übergangsregelungen treffen.

    Zu den Einzelheiten siehe den Beitrag von Benedikt Rohrßen, Zeitschrift für Vertriebsrecht 2017, 186 ff. („Ingmar reloaded – Handelsvertreter-Ausgleich bei umgekehrter Ingmar-Konstellation nicht international zwingend„).

    Quick Summary: In Germany, on termination of a distribution contract, distribution intermediaries (especially distributors / franchisees) may claim an indemnity from their manufacturer / supplier if their position is similar to that of commercial agents. This is the case if the distribution intermediary is integrated into the supplier’s sales organization and obliged to transfer its customer base to the supplier, i.e. to transmit its customer data, so that the supplier can immediately and without further ado make use of the advantages of the customer base at the end of the contract. A recent court decision now aims at extending the distributor’s right to indemnity also to cases where the supplier in any way benefited from the business relationship with the distributor, even where the distributor did not provide the customer data to the supplier. This article explains the situation and gives tips on how to overcome the ambiguity that this new decision brings with it.

    A German court has recently widened the distributor’s right to goodwill indemnity at termination: Suppliers might even have to pay indemnity if the distributor was not obliged to transfer the customer base to the supplier. Instead, any goodwill provided could suffice – understood as substantial benefits the supplier can, after termination, derive from the business relationship with the distributor, regardless of what the parties have stipulated in the distribution agreement.

    The decision may impact all businesses where products are sold through distributors (and franchisees, see below) – particularly in retail (especially for electronics, cosmetics, jewelry, and sometimes fashion), car and wholesale trade. Distributors are self-employed, independent contractors who sell and promote the products

    • on a regular basis and in their own name (differently from commercial agents),
    • on their own account (differently from commission agents),
    • thus bearing the sales risk, for which – in return – their margins are rather high.

    Under German law, distributors are less protected than commercial agents. However, even distributors and commission agents (see here) are entitled to claim indemnity at termination if two prerequisites are given, namely if the distributor or the commission agent is

    • integrated into the supplier’s sales organization (more than a pure reseller); and
    • obliged (contractually or factually) to forward customer data to the supplier during or at termination of the contract (German Federal Court, 26 November 1997, Case No. VIII ZR 283/96).

    Now, the Regional Court of Nuremberg-Fürth has established that the second prerequisite shall already be fulfilled if the distributor has provided the supplier with goodwill:

    “… the only decisive factor, in the sense of an analogy, is whether the defendant (the principal) has benefited from the business relationship with the plaintiff (distributor). …

    … the principal owes an indemnity if he has a „goodwill“, i.e. a justified profit expectation, from the business relationships with customers created by the distributor.”

    (Decision of 27 November 2018, Case no. 2 HK O 10103/12).

    To support this wider approach, the court abstractly referred to the opinion by the EU advocate general in the case Marchon/Karaszkiewicz, rendered on 10 September 2015. That case, however, did not concern distributors, but the commercial agent’s entitlement to an indemnity, specifically the concept of “new customers” under the Commercial Agency Directive 86/653/EEC.

    In the present case, it would, according to the court, suffice that the supplier had the data on the customers generated by the distributor on his computer and could freely make use of them. Other cases where the distributor indemnity might arise, even regardless of the concrete customer data, would be cases where the supplier takes over the store from the distributor, with the consequence of customers continuing to visit the very store also after the distributor has left.

    Practical tips:

    1. The decision makes the legal situation with distributors / franchisees less clear. The court’s wider approach needs, however, to be seen in the light of the Federal Court’s case law: The court still in 2015 denied a distributor the indemnity, arguing that the second prerequisite was missing, i.e. that the distributor was not obliged to forward the customer data (decision of 5 February 2015, case no. VII ZR 315/13, following its earlier decision re Toyota, 17 April 1996, case no. VIII ZR 5/95). Moreover, the Federal Court also denied franchisees the right to indemnity where the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (decision of 5 February 2015, case no. VII ZR 109/13 re bakery chain “Kamps”). It remains to be seen how the case law develops.

    2. In any case, suppliers should, before entering the German market, consider whether they are willing to take that risk of having to pay indemnity at termination.

    3. The same applies to franchisors: franchisees will likely be able to claim indemnity based on analogue application of commercial agency law. Until today, the German Federal Court of Justice has denied the franchisee’s indemnity claim in the single case and therefore left open whether franchisees in general could claim such indemnity (e.g. decision of 23 July 1997, case no. VIII ZR 134/96 re Benetton stores). Nevertheless, German courts could quite likely affirm the claim in the case of distribution franchising (where the franchisee buys the products from the franchisor), provided the situation is similar to distributorship and commercial agency. This could be the case where the franchisee has been entrusted with the distribution of the franchisor’s products and the franchisor alone is entitled, after termination of contract, to access the customers newly acquired by the franchisee during the contract (cf. German Federal Court, decision of 29 April 2010, Case No. I ZR 3/09, Joop). No indemnity, however, can be claimed where

    • the franchise concerns anonymous bulk business and customers continue to be regular customers only de facto (decision of 5 February 2015 re the bakery chain “Kamps”);
    • or production franchising (bottling contracts, etc.) where the franchisor or licensor is not active in the very sector of products distributed by the franchisee / licensee (decision of 29 April 2010, Case No. I ZR 3/09, Joop).

    4. The German indemnity for distributors – or potentially for franchisees – can still be avoided by:

    • choosing another law that does not provide for an indemnity;
    • obliging the supplier to block, stop using and, if necessary, delete such customer data at termination (German Federal Court, decision of 5 February 2015, case no. VII ZR 315/13: “Subject to the provisions set out in Section [●] below, the supplier shall block the data provided by the distributor after termination of the distributor’s participation in the customer service, cease their use and delete them upon the distributor’s request.„). Though such contractual provision appears to be irrelevant according to the above decision by the Court of Nuremberg, the court does not provide any argument why the established Federal Court’s case law should not apply any more;
    • explicitly contracting the indemnity out, which, however, may work only if (i) the distributor acts outside the EEA and (ii) there is no mandatory local law providing for such indemnity (see the article here).

    5. Further, if the supplier deliberately accepts to pay the indemnity in return for a solid customer base with perhaps highly usable data (in compliance with the EU General Data Protection Regulation), the supplier can agree with the distributor on “entry fees” to mitigate the obligation. The payment of such entry fees or contract fees could be deferred until termination and then offset against the distributor’s claim for indemnity.

    6. The distributor’s goodwill indemnity is calculated on basis of the margins made with new customers brought by the distributor or with existing customers where the distributor has significantly increased the business. The exact calculation can be quite sophisticated and German courts apply different calculation methods. In total, it may amount up to the past years’ average annual margin the distributor made with such customers.

    The legal form of a GmbH (limited liability company) is very popular in Germany and is also one of the most frequently chosen forms of market entry for foreign investors. Its establishment is relatively simple and quick, the GmbH offers shareholders the desired limitation of liability and enjoys a high reputation in business relations, both in Germany and abroad. The statutory minimum share capital of 25,000 euros documents a certain seriousness and is intended to protect creditors.

    However, the opening of a German bank account to which the shareholders are to pay their capital contributions is usually a factual problem when setting up a GmbH; the capital stock must be provided before the company is registered in the German commercial register. On the one hand, it is not uncommon for German financial institutions to refuse to open accounts to foreign shareholders per se. On the other hand, it is almost standard today that the opening of a bank account for a new company in which foreign shareholders are to hold shares can take several weeks for various internal bank reasons. In practice, this means that the entry of the company in the commercial register can be suspended for several weeks or even months. Valuable time is lost, especially if you are about to start a project in Germany and everything is already prepared.

    Do you have to accept this unnecessary delay? No, not at all.

    There is a much faster and more acceptable way.

    A bank account is not required for the establishment of a GmbH. The German corporate law does not provide for this either. In practice, however, it has become common to open an account directly when a company is established. Of course, this only makes sense if the account is opened quickly and immediately. If, however, it is foreseeable in advance that there might be problems opening an account with a German bank, a different procedure is recommended.

    The managing director of the newly established GmbH (he is usually already appointed during the notarial establishment of the company) has to assure in the registration of the new company to the commercial register that the capital contributions are in the free and unrestricted disposal of the management. The law does not stipulate that this can only take place if the payment is made to a bank account of the GmbH. It is also possible and permissible for the managing director to opens a company cash box (cash register) in which the shareholders hand over the capital contributions in cash and the managing director notes the payment in the cash book. A copy of the cash book or a confirmation of the managing director can be handed over to the notary as proof of the payment, who then also forwards this copy to the commercial register.

    In the incorporation practice and experience of the author, this procedure has so far been accepted by the commercial registers without objection. All GmbHs founded in this way were successfully registered.

    The author of this post is Dominik Wagner.

    To create a homogeneous franchise system where all franchisees have to comply with the same requirements, franchisors typically use standard form franchise contracts – i.e. contracts pre-formulated drafted and provided by the franchisor for a multiple number of franchisees.

    Within Germany, such franchise contracts have to comply with the quite strict German laws on standard form contracts (even in B2B). As a rule of thumb, such standard form contracts must be reasonable in order to be valid. Vice versa, they are void if they unreasonably disadvantage the franchisee, especially if

    • they are not compatible with essential principles of law, or
    • restrict essential rights or duties arising from the nature of the franchise contract to such an extent that the contractual purpose is endangered.

    The same goes for handbooks, guidelines or other manuals: they all qualify as standard form contracts under German law (sec. 305 (1) German Civil Code [“BGB”]).

    Moreover, franchise contracts must not excessively restrict the franchisee’s economic freedom. Worst case risk – as recently reconfirmed by the Federal Court –: the entire franchise contract is void!

    “A franchise agreement is null and void in its entirety because of infringing sec. 138 BGB if the franchisee’s economic freedom is excessively impaired due to a large number of provisions which advantage the franchisor unilaterally and disadvantage the franchisee, for which no even approximately appropriate compensation is granted to the franchisee (…). This requires an overall assessment of the contractual agreement and the circumstances leading to the conclusion of the contract. Indications of an immoral gagging of the franchisee may be a provision with stipulates the franchisor’s authority to collect debts, thus enabling the franchisor to redirect payments to the franchisor, as well as contractual provisions restricting the franchisee’s economic freedom beyond what is typical for such a distribution system.”

    (Decision of 11.10.2018, Case No. VII ZR 298/17, para. 17 [own translation] – regarding a “licensing contract” for realtors).

    Practical advice

    1. This new decision by the Federal Court confirms the rather restrictive, rather franchisee-friendly decisions handed down by German courts in the past (e.g. the Federal Court’s Decision on fast food chains of 12.11.1986, Case No. VIII ZR 280/85, para. 10).
    2. To minimize the risk of invalidity, franchisors ideally observe the relevant statutory requirements on standard form contracts and the relevant case law on franchise contracts. According to the latest decision above, special care should be taken when the franchise contract provides for the franchisor’s power to collect debts. A way out could be the choice of another law – if the franchisor is based outside Germany (cf. Art. 3 Rome-I-Regulation).
    3. For guidance on franchisors’ advertising and pricing campaigns and compliance with antitrust law, check out the article “Franchise systems: ad campaigns with low prices can come costly!”.

    Franchisors may run ad campaigns with low prices. Such campaigns, however, can come costly if they have an anticompetitive effect, especially if they factually force the franchisees to offer the products for the low prices.

    Best example: pricing campaigns for the “burger of the week”, as decided by the Munich Regional Court in its decision of 26 October 2018 (Case No. 37 O 10335/15).

    The situation

    The plaintiffs are franchisees of the defendant’s franchise network, a restaurant chain. In addition to the obligation to pay „royalties“ in return for the use of the franchise systems and its trade marks (5%), the franchise agreements also obliged the franchisees to pay a sales-related advertising fee. The defendant and franchisor used the advertising fees of the franchisees, among others, to advertise products from the plaintiffs‘ menu at low prices, e.g. under the slogan „King of the Month„. By participating in the advertising campaigns and its low prices, the sales of the franchisees increased and thus the franchise fee they had to pay. After some time, the franchisees decided that this advertising campaign caused them financial damage – because the products offered for a low price affected the sale of products offered at a normal price (“cannibalism effect”). They no longer participated in the campaign and demanded an appropriate reduction of their advertising fee. Among other things, they brought an action for an injunction against the use of the advertising fee for the campaign complained of and for a declaratory judgment of the liability to pay damages. The Regional Court granted both motions.

    The main reason. The advertising campaigns had the effect of restricting competition, namely the franchisees’ ability to determine their sale prices (contrary to sec. 1 and 2 (2) German Act against Restraints of Competition and Art. 2 (1), Art. 4 a) Vertical Block Exemption Regulation). After all, the franchisor set – so the court – the resale price through the de facto binding effect of the ad campaign.

    The decision stands in line with the previous case law, especially of the German Federal Court’s decisions on low-price campaigns by franchisors of

    • self-drive rental vehicles (“Sixt ./. Budget”, 02.02.1999, Case No. KZR 11/97, para.30),
    • pet food (“Fressnapf”, 04.02.2016, Case No. I ZR 194/14, para. 14), and
    • glasses within a dual distribution system where the franchisor sold the products through its own branches and through franchisees without differentiating between branch and franchise operations (“Apollo Optik”, 20.05.2003, Case No. KZR 27/02, para. 37).

    Practical tips

    1. Obligations that are essential for running the franchise system do not restrict competition for the purposes of the EU antitrust rules (similar to the US law’s “ancillary restraints doctrine”). In particular, the following restrictions are typically indispensable components of a functioning franchise agreement:
    • Restrictions of the transfer of know-how;
    • Non-compete obligations (during and after the term of the agreement), prohibiting the franchisee from opening a shop of the same or similar nature in an area where he may compete with other members of the franchise network;
    • Obligations of the franchisee not to transfer his shop without the franchisor’s prior approval.

    (cf. EU Court of Justice, 28.01.1986, Case “Pronuptia”, Case No. 161/84 para. 16. 17).

    1. However, franchise systems are not per se exempted from the prohibition of restricting competition. Therefore, watch out to comply with the EU antitrust rules to avoid painful fines and ensure that the franchise agreement can be enforced.
    2. The prohibition of price-fixing (or Resale Price Maintenance) applies to the relationship between franchisor and franchisee if the franchisee bears the economic risk of its enterprise. To avoid that an ad campaign with recommended resale prices constitutes an anticompetitive price-fixing, the concrete situation needs to be assessed thoroughly. What helps to avoid also any factual binding effect:
    • Add a clarifying note: “Only at participating restaurants in … . As long as stocks last.”
    • Ensure that such note is clearly visible, e.g. by adding an asterisk “*” to the price.
    • Avoid any measures that could be interpreted as pressure or incentive for the franchisees and which would turn the recommended price into a fixed price (e.g. because other pricing would otherwise lead to negative evaluations).
    1. Such ad campaigns may work, as a UK court’s decision shows: According to the BBC, Burger King franchisees sued the franchisor in 2009 “because a corporate promotion required franchisees to sell a double cheeseburger for $1 that cost a $1.10 to make. The court ruled for Burger King.” Under the above circumstances and also for short-term promotions, franchisors may even impose the resale price – such campaigns just need to be well prepared.
    2. For an overview on resale price maintenance, see the Legalmondo article Resale Price Maintenance and Exceptions for short-term promotions.
    3. Resale Price Maintenance can come costly – in 2018, the European Commission imposed fines of EUR 111 million in total on four consumer electronics manufacturers – Asus, Denon & Marantz, Philips and Pioneer – for fixing online resale prices (cf. the Press release of 24 July2018).

    “Luxury goods justify online sales bans” on third party platforms – as stated in the press release no. 30/2018 of the Higher Regional Court of Frankfurt of July 12, 2018. After the long-awaited Coty-ruling of the ECJ (see the article of December 2017, https://www.legalmondo.com/2017/12/eu-court-justice-allows-online-sales-restrictions-coty-case/), the Higher Regional Court of Frankfurt has now applied the ECJ’s guidelines to Coty’s ban of sales via third party platforms and declared it effective – which was actually expected (I). Other high-quality goods – also outside the luxury segment – can justify platforms bans as well – at least this was decided by the Court of Appeal of Hamburg with regard to an eBay ban (II.). The article ends with some practical conclusions (III.).

    Luxury products justify platform bans

    According to the judgment of the Frankfurt Court of Appeal, Coty can prohibit the distributor from selling its products via third party platforms. Based on Coty’s wording in the selective distribution agreement, however, any distributor is free to establish advertising cooperations with third party platforms, where customers are redirected to the distributor’s own online shop. According to the judgment, the online marketplace ban is already admissible under the EU Vertical Block Exemption Regulation, since it does not constitute a hardcore restriction. The distribution ban could possibly even be exempted from the cartel prohibition, in the field of selective distribution; in this case, it would only be doubtful whether the prohibition of all „sales cooperation with a third party platform, outwardly recognisable from others, regardless of its concrete structure, would be a reasonable mean for the intended aim“ (translated text from the original German version), i.e. whether it would be proportionate or whether there would be other means, less interfering with the dealer’s competitiveness. This question was left open by the Court.

    Also other high-quality goods may allow platform bans

    The case decided by the Hamburg Higher Regional Court (decision of March 22, 2018, file no. 3 U 250/16) concerns a qualitative selective distribution system for food supplements and cosmetics, which runs via the so-called network marketing, as well as via internet. The distribution guidelines contain, among other things, specific indications regarding the distributor’s website, the contact possibilities for customers in accordance with the „principle of personal sales of goods“ (since the distribution system aims to sell the product tailored to the customers’ personal needs based on personal advice), as well as the quality of information and the product presentation. The „distribution … via eBay and comparable e-commerce platforms“ is expressly prohibited, as it does not meet the quality requirements, at least not „according to the current state“ (translated text from the original German version).

    The Court of First Instance considered the platform ban to be admissible (District Court of Hamburg, judgment of November 4, 2016, Case No. 315 O 396/15) – which has now been confirmed by the Higher Regional Court of Hamburg. This is because qualitative selective distribution systems are not only admissible for luxury goods and high-technology goods, but also for (other) high-quality goods, „if the goods sold are high-quality and the distribution is combined with parallel customer consulting and support services, with the aim, among other things, of illustrating to the customer an overall sophisticated, high-quality and upscale end product and building up or maintaining a specific product image“ (translated text from the original German version).

    Within such a selective distribution system for the distribution of food supplements and cosmetics, it could then be admissible “to prohibit the distribution partners, by means of suitable company guidelines, from selling those goods via a specific online sales platform, in order to preserve the product image and the related practice of customer-binding support, as well as to prevent product- and image-damaging business practices of single distribution partners as occurred and consequently pursued in the past” (translated text from the original German version).

    The peculiarity here was that they were not „pure prestige products“ and, moreover, the Hamburg Higher Regional Court did not limit itself to the – in view of the market shares readily feasible – verification that the platform under Article 2 of the Vertical Block Exemption Regulation was admissible. Rather, the Court vividly and precisely declined the so-called Metro criteria.

    Practical conclusions

    1. The Internet remains a growth driver for consumer goods, as also the market data from the German Trade Association confirm: „E-commerce remains a growth driver„.
    2. At the same time, brand manufacturers in particular want growth to be regulated according to the rules of their distribution system and to their requirements. These include, especially for luxury and technically sophisticated products, as well as other products requiring intensive assistance, strict specifications regarding brand identity and advertising appearance (specifications regarding brick store clauses, marketplace bans) and the services to be offered (e.g. chat and / or hotline with information on availability).
    3. Manufacturers should check whether their platform bans comply with ECJ’s requirements or if they wish to impose platform bans – in selective, exclusive, franchise and open distribution.
    4. Who wants to take as little risk as possible, should remain cautious with platform bans outside the selective distribution of luxury goods. In its first reaction, also the Federal Cartel Authority (BKartA, short for “Bundeskartellamt”) declared that the Coty-ruling should apply exclusively to original luxury products: “#Brand manufacturers still have no carte blanche on #platform bans. First assessment: „Limited impact on our practice“ (BKartA on Twitter, December 6, 2017). Nevertheless, the European Commission has now spoken against this: in its Competition Policy Brief of April 2018 („EU competition rules and marketplace bans: Where do we stand after the Coty judgment?), the European Commission states – rather incidentally – that the argumentation of the ECJ in the Coty case should also apply regardless of the luxury character of the distributed products:

    „The arguments provided by the Court are valid irrespective of the product category concerned (i.e. luxury goods in the case at hand) and are equally applicable to non-luxury products. Whether a platform ban has the object of restricting the territory into which, or the customers to whom the distributor can sell the products or whether it limits the distributor’s passive sales can logically not depend on the nature of the product concerned.“

    In fact, the ECJ has broadly defined „luxury goods“ in its judgment: namely as goods whose quality is „not just the result of their material characteristics“ but of intangible values – which is usually the case for branded goods (see the Coty-judgment of the ECJ of December 6, 2017, para. 25 and, with regard to „quality goods“, the conclusion of the EU Advocate General of July 26, 2017, para. 92). Furthermore, the ECJ only requests that the goods be bought „also“ because of their prestige character, not „alone“ or „above all“ because of it. In conclusion, a lot of aspects suggest that all brand manufacturers can include platform bans in their distribution agreements – at least in case of market shares up to max. 30%.

    1. Those who are not afraid of confrontations with dealers and antitrust authorities can definitely impose platform bans outside the selective distribution of luxury goods as well – or increasingly rely on premium products and luxury – such as at the perfumery chain Douglas (see the Süddeutsche Zeitung of March 8, 2018, p. 15: „Active and unconventional, Tina Müller ends discounts on Douglas and aims at luxury„).
    2. To ensure consistent quality of sales, specific quality targets are recommended, especially for online sales. The list of possible quality targets is very long. The specifications that have proven to be best practice concern in particular:

    – the positioning as a retailer (platform, product range, communication)

    – the design of the website (quality, look & feel, etc.)

    – the content and product offer of the website,

    – the processing of online purchases,

    – the consulting and customer service, as well as

    – the advertisement.

    1. It is also essential to note that manufacturers are not allowed to totally prohibit distributors from selling online; nor are sales requirements allowed to amount to such a total ban – as the Courts now see in the case of Ascis‘ ban of price comparison engines (to this regard, see the following article from April 2018: https://www.legalmondo.com/2018/04/germany-ban-of-price-comparison-engines-and-advertising-on-third-party-platforms/).
    2. Further details can be found in German in the following Law Journals:

    – Rohrßen, Vertriebsvorgaben im E-Commerce 2018: Praxisüberblick und Folgen des „Coty“-Urteils des EuGH, in: GRUR-Prax 2018, 39-41;

    – Rohrßen, Internetvertrieb von Markenartikeln: Zulässigkeit von Plattform-verboten nach dem EuGH-Urteil Coty, in: DB 2018, 300-306;

    – Rohrßen, Internetvertrieb: „Nicht Ideal(o)“ – Kombination aus Preissuchma-schinen-Verbot und Logo-Klausel, in: ZVertriebsR 2018, 120-123;

    – Rohrßen, Internetvertrieb nach Coty – Von Markenware, Beauty und Luxus: Plattformverbote, Preisvergleichsmaschinen und Geoblocking, in: ZVertriebsR 2018, 277-285.

    Benedikt Rohrssen

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