On 17 December 2015, the German Parliament (Deutscher
Bundestag) passed a bill on the improvement of enforcement of data
protection provisions protecting consumers (Entwurf eines
Gesetzes zur Verbesserung der zivilrechtlichen Durchsetzung von
verbraucherschützenden Vorschriften des
Datenschutzrechts). Under the new law, registered consumer
associations will have the right to sue companies for violations of
data protection laws ("class actions").
To this aim, certain amendments will be made to the German
Injunction Act (Unterlassungsklagengesetz). The bill is
subject to signing by the Federal President and announcement in the
Federal Law Gazette (Bundesgesetzblatt). The new law will
enter into force one day after announcement in the Federal Law
Class actions to be expanded to data protection laws
Under the new law, collection, processing and utilization of
personal data of consumers for the purposes of advertising, market
research, operation of credit agencies, profiling, address trading,
other data trading and similar purposes, will be subject to
supervision by registered consumer associations, which will have
their own right to sue companies that are in breach of the relevant
statutory data protection provisions. This will inter alia cover
privacy issues related to contracts and terms and conditions. An
exemption will apply to the extent that collection, processing and
utilization of personal data will be necessary for establishment,
performance or termination business transactions with
Consumer associations are obliged to submit annual reports about
issued warning letters and initiated class actions based on data
protection breaches with the Federal Office of Justice
(Bundesamt für Justiz) for monitoring purposes.
Further, courts shall hear the competent data protection authority
before making a judgment, unless an injunction for emergency has
been requested by the relevant consumer association.
During a grace period until 30 September 2016, consumer
associations may not initiate class actions in relation to data
transfers to the United States which have been based on the
European Commission's Safe Harbour Decision prior to its
invalidation by the Court of Justice of the European Union on 6
In addition: restrictive contractual form requirements to be
prohibited in consumer contracts
The bill contains also a substantial change in consumer
protection under the German Civil Code (Bürgerliches
Gesetzbuch – BGB). Under the new law, a clause in a
consumer contract by which notices or declarations that are to be
made by the consumer to the company or a third party are tied to a
more stringent form than "text form", will be
prohibited. Under the existing law, a consumer may be required to
observe the more stringent "written form". Under
the new law, written form may still be required in contracts which
are subject to a statutory requirement for notarization.
Companies are called on to review and amend their terms and
conditions for consumer contracts accordingly within a grace period
until 30 September 2016. After expiration of this grace period,
consumer associations will have the right to take companies to
court for use of prohibited and, therefore, invalid terms and
conditions. According to the legislative materials, the Federal
Statistical Office estimates that in Germany, around 750,000
consumer contracts require consumers to observe written form. The
economic burden for companies to amend their terms and conditions
is estimated at around EUR 70 million.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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