Companies and consumers are making increased use of the Internet for their business transactions. More and more companies in Germany are offering their products and services via the Internet. Thus, German companies and courts are increasingly likely to look to German unfair competition law as a means for regulating Internet commerce.

The main provisions of German unfair competition law are contained in the Gesetz gegen den unlauteren Wettbewerb (UWG/German Unfair Competition Act). In principle, the Unfair Competition Act applies to all forms of communication and all forms of advertising. Thus, the provisions of the UWG also apply to advertising and other forms of communication in the Internet.

There are two basic requirements for the UWG to apply: The communication must be in a business context (im Geschaftsverkehr). This is interpreted very broadly. Only purely private communication that has no business context is excluded. Furthermore, the communication must be for purposes of competition ("zu Zwecken des Wettbewerbs"). This requirement is met if the communication is objectively likely to help a competitor or competitors and if this is also at least one of the intentions of the communicating party. It goes without saying that these are relatively simplified explanations regarding the requirements under German unfair competition law. Once these requirements are met, German unfair competition law is applicable to all communications in the Internet. This is of importance to all companies advertising in the Internet. They must note that German unfair competition law is relatively strict, as compared to the laws in other countries (especially in the United States). For instance, German unfair competition law in principle still prohibits comparative advertising. Also, it sets up very strict standards for misleading advertising.

German courts have already commenced applying unfair competition law to the Internet. In a decision of December 19, 1996, the District Court Trier prohibited a dentist from advertising his services via the World Wide Web on the grounds that ethical guidelines applicable to dentists prohibited such advertising which thus also violated Sec.1 UWG.

It is important to note that German competition law may be applied to data made available in the Internet although the communicating party is not even interested in specifically addressing German customers or consumers. Thus, the mere fact that data is made available on the World Wide Web - and thus in Germany - may lead to problems for companies in Germany since they may be attacked because their data is accessible to German Internet users. It is advisable for companies actively using the Internet for purposes of promotion and marketing to address this issue. One option is to make sure that Internet communications available to German Internet users are in compliance with German unfair competition law. Another option is to try reducing the practical and legal risk of German unfair competition law being applied to certain Internet communication at all. If the data is accessible in Germany, this is more difficult and requires a more creative approach. One obvious option for trying to achieve this aim is adding language to the effect that the data is - broadly speaking - not intended for or not "applicable" to Germany. Such an approach may not eliminate all risks, but if appropriately worded could at least serve to reduce risks.

Apart from German unfair competition law, German law in general is applicable to Internet data available in Germany/Internet communication in Germany, such as general German civil and contractual law, German law of torts, German media and telecommunications law, German penal law and data protection law. Thus, enterprises targeting the German market via the Internet will have to address these legal issues to avoid unnecessary legal problems in Germany.

The content of this article is intended to provide a general guide to the subject matter. It is therefore recommended that specific professional advice is sought before any action is taken.

For further information please contact Stefan Volker, Gleiss Lutz Hootz Hirsch & Partners, Maybachstrabe 6, D-70469 Stuttgart, Germany, Tel.: +49/711/8997-0, Fax: +49/711/855096,