17 October 2022

Online Platforms: Does My Website Meet The Legal Requirements?

Oppenhoff & Partner


Oppenhoff & Partner
Online platforms are subject to a number of regulatory requirements. New regulations not only come from Brussels, but also from Berlin.
European Union Corporate/Commercial Law
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Online platforms are subject to a number of regulatory requirements. New regulations not only come from Brussels, but also from Berlin. In addition to general regulations for online platforms, there are numerous special regulations, e.g. for streaming platforms or social media. Read here which regulations are important for your website.

We have summarised the most important points for you below. Not all regulations apply equally to all platforms. The link will take you directly to the sections of relevance to you.

Telemedia Act, Interstate Media Treaty and the GDPR

The Telemedia Act (TMG) applies to all online platforms. In principle, they do not require any special authorisation, such as a broadcasting licence (Sec. 4 TMG). This also applies to streaming platforms, as long as there are no editorially planned and specifically timed streams. As most will know: all online platforms must contain an imprint (Sec. 5 TMG) and data protection information (Articles 13, 14 GDPR).

Furthermore, there are additional data protection requirements for data processing via the website, in particular with regard to tracking (for example, through cookies). More information on tracking cookies can be found in this Newsletter. In addition, the Telecommunications-Telemedia Data Protection Act (TTDSG) contains provisions for telemedia providers regarding necessary technical and organisational precautions, the processing of data for the purpose of protecting minors, and the provision of information on inventory and usage data to public authorities (Secs. 19 et seqq. TTDSG). Finally, the processing of data on terminal devices is also regulated (Sec. 25 et seq. TTDSG).

In addition, there are special obligations for video sharing platforms under the TMG:

  • Users must be provided with a function that allows them to declare whether videos contain commercial communication, in particular advertising (Sec. 6 (3) TMG)
  • Providers of video sharing platforms are obliged to identify uploaded videos with commercial communication as such if they have positive knowledge that the videos contain commercial communication (Sec. 6 (4) TMG).
  • Users must be able to electronically report illegal content provided on the platform (Sec. 10a TMG).
  • A process for checking and remedying users' complaints must be implemented (Sec. 10b TMG).

Violations of the TMG can be punished with a fine of up to 50,000 euros. In the event of a violation of the GDPR, there is additionally the threat of a fine of up to twenty million euros or four percent of the global annual turnover. The TTDSG also contains provisions on fines of up to 300,000 euros.

The Interstate Media Treaty (MStV) supplements the provisions of the TMG on the content of telemedia, but generally refers to websites with journalistic and editorial content (e.g., from daily newspapers). In general, operators of social media platforms must identify social bots as such in accordance with Sec. 18 (3) MStV. In addition, opinion polls pursuant to Sec. 19 (2) MStV must always state whether they are representative surveys. Sec. 22 (1) MStV sets out requirements for advertising (which must be clearly recognisable and separated from the other content of the telemedium), especially for journalistic and editorial websites. Finally, Secs. 74 to 99 MStV contain special provisions for telemedia comparable to broadcasting, media platforms and user interfaces, media intermediaries and video sharing services. The latter must, for example, in some cases observe the same principles as broadcasters regarding advertising and, in the case of advertising by third parties, must subject them to a corresponding obligation (Sec. 98 MStV).

In the event of a breach of the obligations arising from the MStV, the competent state media authority can also take the necessary measures (in particular, objection, prohibition, blocking, withdrawal and revocation) against non-journalistic editorial telemedia pursuant to Sec. 109 MStV. The criteria for constituting an administrative offence in Sec. 115 MStV (fines of up to EUR 500,000), on the other hand, apply only to broadcasters of private-sector broadcasting.

E-commerce requirements for contract conclusions

If platform operators conclude contracts with consumers via the platform, they must comply with consumer protection law. This means that special content requirements for contracts and information obligations pursuant to Secs. 312d, 312i BGB as well as Sec. 36 of the German Consumer Dispute Resolution Act [Verbraucherstreitbeilegungsgesetz, VSBG] (information about the right of withdrawal, total prices or calculation bases, for example through automated decision-making, shipping costs, delivery reservations, etc.) have to be observed.

In addition, e-commerce websites must now provide a cancellation button that facilitates the consumer's cancellation of any contract concluded online (Sec. 312k BGB (in force since 1 July 2022).

If, on the other hand, business is conducted exclusively with traders outside the scope of consumer protection law, a corresponding reference to this on the website is mandatory. It is advisable to enquire with each customer as to its commercial nature (by means of a checkbox near the order button or the like).

If platform operators merely enable the conclusion of contracts between third parties without becoming contracting parties to these transactions themselves, these platform operators (online marketplaces) now have information obligations themselves under consumer protection law with regard to these contracts, including information on rankings and the comparison of goods as well as on the supplier of the goods and its link to the marketplace Sec. 312l BGB in conjunction with Art. 246d Sec. 1 EGBGB). This is the case, for example, insofar as contracts are concluded between traders affiliated to Amazon and customers via Amazon Marketplace.

If a contract has been concluded without observing consumer protection law, this can have far-reaching consequences under civil law, depending on the specific violation, such as the extension of the consumer-friendly right of withdrawal from 14 days to a maximum of 1 year and 14 days. In addition, a violation of the above-mentioned information obligations as well as other consumer protection obligations may be punished with a fine of up to 50,000 euros. In case of companies whose annual turnover in the EU countries affected by the violation exceed EUR 1.25 million, the fines can amount to up to 4 percent of the annual turnover or - in the absence of indications to estimate the annual turnover - up to EUR 2 million (Art. 246e Sec. 2 EGBGB). In addition, there is the threat of complaints under competition law and, more recently, damage claims of consumers (Sec. 9 (2) of the German Unfair Competition Act [Gesetz gegen den unlauteren Wettbewerb, UWG]).

Copyright Service Providers Act

The Copyright Service Providers Act (UrhDaG) only addresses platform providers whose (at least also pursued) main purpose is to publish, organise and promote for profit large amounts of user-uploaded, copyrighted content (from third parties) and which compete with online content services. The UrhDaG obligates them to acquire licences and to block copyright-infringing content, but also stipulates certain exceptions and limitations to these obligations, e.g. certain uses (such as quotations of works) are permitted without a contractual licence (which must be pointed out to the users).

In addition, under the UrhDaG, affected platform providers must also pay the author an appropriate remuneration for the public reproduction of the work. Direct remuneration claims of the authors against the platform providers are thus possible.

In the event of infringements, the author may also demand injunctive relief and damages from the platform provider pursuant to Sec. 97 German Copyright Act [Urheberrechtsgesetz, UrhG].

P2B Regulation (EU)

The so-called P2B Regulation applies to online platforms on which business users can offer goods and services to consumers, such as Amazon Marketplace, for example. The requirements are intended to protect business users dependent upon the platform provider and must be listed in the platform GTC.

The GTC must, among other things

  • regulate precisely when the provision of the platform for business users can be suspended, terminated or restricted
  • contain information about additional distribution channels or possible partner programmes
  • explain the main parameters and their weighting that determine the ranking, i.e. the order in which individual offers are displayed
  • regulate the termination rights of the business user and specify whether a right of access to the information provided by the business users exists after the end of the contract.

The restriction, suspension or termination of access to the platform for individual business users must be announced (if possible in advance). In addition, the business user must be given the opportunity to defend itself by means of a precisely regulated internal complaints procedure. The provider must name two mediators in the GTC to whom business users can turn. Insofar as the platform provider restricts the business users in the marketing of their products elsewhere, this must be regulated in the GTC.

In addition, the following requirements apply:

  • The GTC must be permanently accessible. It is therefore advisable to add a link to them on the platform.
  • The GTC vis-à-vis existing customers can only be amended according to a specific, predetermined procedure.
  • The identity of the business users must be clearly displayed on the platform.
  • The restriction, suspension or termination of the service must be announced to the business user (if possible in advance).

The P2B Regulation itself does not provide for direct fines or sanctions for violations. However, the Regulation provides a standard of conduct which can, in particular, constitute evidence of unfair business conduct (Sec. 3a UWG) or abusive conduct on the part of market-dominant companies. In the event of a violation, there is a risk in particular of claims to the remedy of the breach, to injunctive relief and also damages, and possibly also fines (e.g. in the event of abuse of a dominant market position).

The Network Enforcement Act

The Network Enforcement Act (NetzDG) applies to online platforms on which users can share and/or publish information and content (social media platforms). The Act only applies if the platform has more than two million users in Germany.

The purpose of the NetzDG is prevent and investigate hate crimes, illegal fake news and other unlawful behaviour on social media platforms. It obliges platform operators to set up an efficient complaints management system. Foreign operators must appoint a German representative. In addition, the NetzDG has been supplemented with semi-annual reporting obligations and notification requirements, and its applicability has been partially extended to video sharing platform services.
In the event of violations of the NetzDG, a fine of up to five million euros may be imposed on a person responsible for the complaints procedure. The fine against the company itself can be up to fifty million euros in case of negligence and up to one hundred million euros in case of wilful intent.

Antitrust law

1. General conditions

From an antitrust law perspective, operators of online platforms should ensure that no competition-relevant information is exchanged between competitors on the platform. Such exchanges are prohibited by antitrust law. An exchange of information that is of relevance to antitrust law can occur in two directions: between platform operators and users/providers (insofar as they are competitors or potential competitors) and between the users/providers themselves.

Accordingly, the platform should be designed in such a way as to exclude the possibility of drawing conclusions about the competitive behaviour of competitors. If the operator is in competition with its platform users (e.g. because it also offers services via the platform itself), it may not obtain access to competitively relevant information of the users/providers (including orders, prices, sales, investments or current business policy). A personnel, organisational, informational and technical separation between the platform and the other business areas of the operator must be ensured.

If the parent company of the platform operator is a competitor of the users/providers, a provision should be included in the articles of association according to which the rights of inspection and information of the shareholders of the platform operator can be denied in cases of doubt (German Limited Liability Companies Act [Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG]). The platform's organisation must be strictly separate from its parent company if the latter is active on the same market as the provider. In the case of overlapping personnel, such personnel must at least have no access to information relating to competition law.

The providers on the platform should be separated from each other by a "Chinese Wall". A technically secure, isolated provider area must be created in which each provider can only view the customer data of its own customers. In order to prevent price-fixing between providers, the identity of the trader should at best only be disclosed in a final step before the contract is concluded. In order to prevent a circumvention of these arrangements through 'competitive deliveries', the platform's code of conduct should prohibit such a violation.

Participation in platforms may also be subject to merger control. Similarly, a cooperation between platforms can be problematic.

2. Regulation of gatekeepers

Online platforms act as intermediaries in multilateral markets. The resulting position vis-à-vis providers and customers can lead to dependencies that are increasingly subject to regulation.

In this context, the German Act against Restraints of Competition [Gesetz gegen Wettbewerbsbeschränkungen - GWB] recognises the intermediation power of platforms as a criterion for determining a dominant position. This may result in claims both to access to the platform itself and to the data of the platform provider. Under certain conditions, such claims are already conceivable if the claimant is dependent on access to the platform or to data (so-called relative market power). Furthermore, the GWB provides an additional regulatory framework for companies with paramount cross-market significance for competition. This is only applied if the German Federal Cartel Office [Bundeskartellamt - BKA] has established the paramount cross-market significance of a company by decision. From now on, it can prohibit certain commercial practices of the company in question (including the self-preferential treatment of its own services and performances over those of competitors or hindrances to interoperability). In essence, the aim here is to document the key positions of very large platform operators that have a central importance in various markets, such as presumably the so-called GAFA, in particular. Accordingly, the BKA has now initiated proceedings against Apple, and Amazon, and has already established the paramount cross-market significance of Google and Meta (formerly Facebook).

The European Commission is seeking a fundamental reform of the regulatory framework for platforms as part of its digital strategy. The cornerstones of this strategy are the Digital Markets Act and the Digital Services Act (following agreement between the Council and the European Parliament, not yet adopted). Economic imbalances and unfair business practices of gatekeepers in the digital world as well as the resulting barely contestable market positions of gatekeepers are to be prevented.

The Digital Markets Act provides a catalogue of prohibitions and obligations for gatekeepers. For example, the use of transaction and user data for personal gain is to be prohibited.

The Digital Services Act is primarily intended to regulate the risks of digital business models (algorithmic decision-making, disinformation campaigns, dissemination of illegal content). Additionally, the liability of the online players involved is to be regulated in particular, and transparency and compliance obligations are to be introduced. The Digital Services Act imposes certain conduct obligations on digital service providers. The businesses covered by the Act are those that operate as intermediaries between consumers and providers of goods, services and content (intermediaries).

In addition, we can assume that the competitive peculiarities arising in online platforms will increasingly be taken into account in other areas as well, for example, in the context of the revision of the so-called Vertical Block Exemption Regulation (Vertical Block Exemption Regulation EU 2022/720) that entered into force in June 2022, which has enormous practical relevance for the e-commerce sector.

3. Consequences in case of violations

In the event of violations of antitrust law, the BKA or the European Commission can impose heavy fines. These can be directed against the company itself, but under certain circumstances also against natural persons. The fines against companies can amount to up to 10% of the respective total turnover achieved in the preceding business year and, in case of natural persons, up to one million euros. In addition, there is a risk of damage claims of third parties, damage to the company's reputation, exclusion from contract award procedures or, in extreme cases, even criminal prosecution. Furthermore, there is a risk of the relevant contractual provisions becoming null and void, and in cases of doubt even of the nullity of the entire contract. Finally, in addition to other official measures, amongst other things claims to injunctive relief and remedy of the violation, as well as claims to access or delivery, are also possible.

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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