Germany: The Saga Of Blocking Creative Content - How Ad Blockers Still Dominate Online Advertising In Germany

Last Updated: 27 September 2016
Article by Thomas J. Farkas

In recent years, German publishing and media houses have struggled to serve their readership with advertisements ("web banners"). Driving this struggle is the variety of ad blocking software available on the market.

The big players in the news service industry have in the majority of cases failed to fight ad blocking software before German courts. Despite the fact that the highest German court, the Bundesgerichtshof ("Federal Court of Justice", and "BGH"), has yet to decide on the legality of ad blockers, several Higher District Courts, e.g. Munich, Hamburg and Cologne, have held that the use of ad blocking software is legal.

For instance, the legality of the ad blocking software "Adblock" by German software company Eyeo GmbH was the subject matter of various cases. Eyeo's business practice offers the open source software "Adblock/Adblock plus" free of charge to Internet users. By virtue of this software, the user can block any web banners when browsing online news services ("blacklisting"). Additionally, Eyeo offers advertisers the possibility of having their web banners displayed, despite the use of ad blocking software, if they are "acceptable ads" (the evaluation which seems to be in the sole discretion of Eyeo). In return for a payment by the respective advertiser to Eyeo, these "acceptable ads" can not be blocked by the software ("whitelisting"). However, in cases where the user does not wish to see any advertisements at all, he/she may set the software to also block whitelisted web banners.

The respective judgments, the thrust of which is very briefly elaborated below, are of particular interest: not only because ad blockers are not well received by advertisers, but also because various legal principles (amongst others Copyright, Competition and Unfair Competition Law) are analyzed in these decisions.

  • Copyright Law: Generally, websites can be protected by German copyright law. The cases at hand beg the question of whether the combination of a website and its web banners is also subject to copyright protection. In order to benefit from this protection, web banners must constitute a part of the copyrightable website. However, on many websites, web banners are an annex to the websites, individualized for each single user by respective cookies. This practice enables the advertiser to offer tailored web banners to each user. Moreover, web banners may change with every visit to the respective website. For these reasons, the courts have dismissed claims for copyright protection.
  • German Unfair Competition Law: Pursuant to Sec. 4 para. 4 of the German Act against Unfair Competition ("UWG"), it is prohibited to "deliberately obstruct competitors". The District Court of Hamburg rejected a claim based on this statute as the defendant Eyeo was, in the court's view, not deliberately obstructing the plaintiffs in distributing their web banners. Instead, the defendant was merely intending to promote its software and increase its revenue. Moreover, the core of the plaintiff's journalistic efforts was not obstructed -only the distribution of web banners. Additionally, the plaintiffs could take other measures to guarantee that the web banners are displayed (e.g. display the web banners inside the journalistic content) or could simply deny the users free access to their news sites. The District Court of Stuttgart additionally argued that it was merely the independent decision of the users to block web banners, not the defendant's.

In late June this year, the Higher District Court of Cologne slightly deviated from the previous jurisprudence. With respect to the practice of "blacklisting", the Court held that Eyeo did not deliberately obstruct its competitors and therefore that the practice of "blacklisting" was compliant with Sec. 4 para. 4 UWG. However, the Court held that the practice of "whitelisting" would result in an "aggressive commercial practice" pursuant to Sec. 4 a UWG (the German legislator only implemented that provision in December 2015). By "whitelisting" web banners, Eyeo would inadmissibly influence the freedom of choice of enterprises who wish to advertise their products and/or services. After their web banners have been blacklisted, these enterprises would be pushed towards "whitelisting" their web banners in return for a payment to Eyeo, resulting in an "aggressive commercial practice".

Since there is a lot at stake for both industries, the BGH may very well take a stand on the matter in the not-so-distant future. In 2004, the BGH held in favour of TV advertisement blocking device. The device in question switched the relevant channels as soon as an advertisement was displayed, only to change back to that channel again once the advertisement sequel was finished. Contrary to the situation in the ad blocking software case, the TV ad blocker only switched channels and did not permanently block a signal. Moreover, the TV signal was not in any way altered. Despite the TV ad blocker being less widespread, there also was no issue of "whitelisting" advertisements.

Until a final decision has been reached, publishing and media houses could follow the lead of "Bild online", one of Germany's biggest online newspapers. After losing the legal battle against an ad blocking software publisher, Bild online decided to block its content to every user who has such an ad blocking software installed. Of course, this measure may cost Bild online a significant part of its readership. It remains to be seen how this saga of advertisement vs. ad blockers will continue in Germany. To be continued...

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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