On 28.05.2022, a large number of new regulations in consumer protection and competition law came into force. With the Act to Strengthen Consumer Protection in Competition and Trade Law (GSVWG), amendments to the EU Omnibus Directive were transposed into German law. In particular, it provides for extended pre-contractual obligations, stricter transparency requirements, regulations on the conclusion of the contract itself and on the right of withdrawal. Violations with an EU-wide dimension (“Union dimension”) can be punished in Germany with fines of up to 4% of a company’s annual turnover. The following aspects are of particular importance:
The GSVWG is intended in particular to improve transparency on online marketplaces as well as around influencer marketing. With the entry into force of the law, operators of online marketplaces and comparison services such as Amazon, eBay, Airbnb and Idealo are now obliged to inform users about the essential criteria of the ranking of the goods, services or digital content they present to consumers as a result of their search query. In doing so, they must provide information about the main parameters of algorithms used as well as their “relative weighting”. Any commissions received must also be made public.
In the case of user ratings, operators must also explain whether and how they ensure that the ratings actually come from consumers. It is expressly forbidden to commission or transmit falsified user ratings or their misrepresentation in social media. If the result of a comparison is displayed to the consumer, references to the providers involved are also necessary.
In addition, marketplace operators must inform customers whether their potential contractual partners are entrepreneurs or consumers. In this way, customers should be better able to judge why which product is at the top of the results lists and whether reviews are serious.
Finally, companies must now document and retain consumers’ consent to telephone advertising. This is a clause from the Fair Consumer Contracts Act.
Conclusion:
We recommend implementing the new legal regulations. Otherwise, in addition to warnings, there is also the threat of considerable fines.
Dr Michael Heinrich