On February 13, 2020, the German Federal Ministry of Justice and Consumer Protection (BMJV) published a proposal to soften the regulatory requirements for influencers for labeling their posts as advertising (Proposal). Under the Proposal, statements posted on social media about products for which no consideration was given – either in the form of monetary compensation or other benefits – shall be excluded from labeling requirements. In the view of the BMJV such posts are intended solely to shape public opinion and are not made in the pursuit of commercial purposes (see the BMJV's press release of February 13, 2020, available in German here).
Recommendations from influencers are highly trusted by their followers. To ensure a sufficient level of transparency, the German regulators have provided regulatory guidance on the labeling of posts as advertising. However, in the past German courts have inconsistently interpreted the statutory labeling requirements applicable to advertising in the context of social media posts by influencers. This has resulted in various restrictive orders against German influencers (please find further details of German case law on this topic in our articles: "Update on transparency requirements for influencer marketing", "Frankfurt Court of Appeals ruling on influencer marketing and manufacturer tags", and "Update on transparency requirements for influencer marketing"). The Proposal's key aim is to achieve legal certainty for influencers.
Planned changes under the Proposal
Pursuant to Section 5a(6) of the German Act against Unfair Competition (Gesetz gegen den unlauteren Wettbwerb – UWG), the failure to properly identify the purpose of a commercial activity may constitute an act of unfair competition. Under the Proposal the following commercial activities shall be excluded from Section 5a(6) UWG:
"As a general rule, a commercial activity is not to be deemed to have a commercial purpose if (a) it primarily serves informative purposes or the shaping of public opinion and (b) no payment or similar consideration has been granted.”
However, according to the Proposal, the burden of proof shall remain with the influencer.
The BMJV's intention to achieve a sufficient level of legal certainty and exclude certain content from the labeling requirements is a step in the right direction. Notably, the Proposal sets limits to the approach taken by German courts, which has led to almost every influencer post being labeled as advertisement.
However, under the Proposal various points remain uncertain. A main concern is that the Proposal gives no guidance on which scenarios should fall within the scope of "similar consideration." While this question will not be of interest to successful celebrities and other leading influencers who receive considerable compensation for each single post, it will have a significant impact on rising stars who may receive products, including items of rather low value, for free instead of monetary compensation. The Proposal lacks clarification as to the circumstances under which non-monetary compensation shall trigger corresponding labeling requirements.
Influencers, brand ambassadors and organizations that cooperate with them should monitor further developments concerning the legal framework on labeling requirements.
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