The plaintiff, a competition association, first sent a warning letter to the defendant influencer in July 2018 because she had tagged companies in photos on Instagram without labeling the posts as advertising. As soon as one clicked on the photos, the names of the companies manufacturing the accessories and clothing worn by the influencer, marked by means of tap tags, became visible. When clicking on the tap tags, the user was taken to the company's profile page. As a result of the warning letter, the influencer conceded a cease-and-desist declaration to the plaintiff.
In October 2019, three new posts were published on the Instagram account of the same influencer, again marked with corresponding tap tags. In part, the linked products had been given to the influencer free of charge; in part, the influencer had purchased the products using her own funds.
In the opinion of the plaintiff, this constituted a breach of the influencer's signed cease-and-desist declaration. The plaintiff therefore demanded payment of a contractual penalty and the signing of a further cease-and-desist declaration. However, the influencer only partially complied. The plaintiff then filed a complaint with the Cologne District Court. Both the Cologne District Court as well as the Higher District Court of Cologne, as the appeal instance, granted the plaintiff’s claims.
In summary, the BGH to a large extent confirms the decision of the Appeal Court.
First, the BGH repeats the principles deriving from its previous influencer decisions coming to the conclusion that, through the disputed Instagram posts, the influencer had acted in commerce both for the benefit of her own company and for the benefit of the third-party companies (see our article on the decision).
In accordance with its opinion expressed in the previous decisions, the BGH differentiates between acts in favor of one’s own company and acts in favor of third-party companies when assessing the unfairness of business acts.
As a reminder, the BGH had ruled that Section 6 (1) No. 1 of the German Telemedia Act, Section 58 (1) Sentence 1 of the Broadcasting Treaty and Section 22 (1) Sentence 1 of the State Media Treaty, which each require a consideration for the existence of a "commercial communication" or "advertising", would limit the scope of application of the general unfair competition provision of Section 5a (6) of the Act against Unfair Competition as sector-specific special provisions. If there was no consideration, a violation of Section 5a (6) of the Act against Unfair Competition could not be considered (see our article on influencer case law).
In accordance with this case law, an infringement of Section 5a (6) of the Act against Unfair Competition has to be rejected also in the present case with regard to those products purchased by the influencer herself from the company.
However, this has to be assessed in a different way with regard to those products having been provided to the influencer free of charge, which must to be regarded as a "consideration" within the meaning of Section 6 (1) no. 1 1 of the German Telemedia Act, Section 58 (1) sentence 1 of the Broadcasting Treaty and Section 22 (1) sentence 1 of the State Media Treaty. The purpose of these special provisions, i.e. to prevent hidden advertising, is only achieved if every monetary advantage - in the present case also products free of charge - is understood as a consideration. Providing products for free had been the only cause for publishing the Instagram posts in question, which was also the intention of the companies. Moreover, the precise value of the products provided for free is not relevant, as a minimum amount in terms of value does not exist.
By this ruling, the BGH has further consolidated its maturing case law on the topic of influencer and social media marketing. Even if the decision does not come as a great surprise, the clarification that the advertising of products provided free of charge can also constitute a commercial communication or advertising, which is subject to labeling requirements, provides more legal certainty in practice. By this ruling, the BGH is also in line with the CJEU. The latter recently ruled that a publication within the meaning of No. 11 p. 1 of Annex I of Directive 2005/29 is "paid" if a consideration of monetary value is provided. This is the case not only with the payment of an amount of money, but also with any other form of benefit, provided there is a clear connection between the benefit granted and a publication.
Authored by Yvonne Draheim and Sabrina Mittelstaedt