The application of these provisions to influencer posts in social media, in particular posts that link to the accounts or websites of the manufacturers of the products depicted in the posts by means of “tap tags”, was unclear and hotly disputed for a long time. A uniform line of the courts dealing with the increasing number of lawsuits against influencers could not be discerned.
The dispute essentially revolved around three questions:
1. When is a post that links to a company’s website by means of so-called “tap tags” to be considered advertising (as opposed to editorial content)?
2. When is it sufficiently clear from the circumstances surrounding the post that a commercial purpose is being pursued so that labelling is unnecessary?
3. If labelling is required, how should it be done?
While with regard to the last question there was already broad agreement that labelling as advertising must be made clearly at the beginning of the post and must cover the post as a whole, not just individual contents, representations or text sections (OLG Braunschweig, GRUR-RR 2020, 452), the opinions of the courts as to when a post is to be regarded as advertising and when labelling is dispensable because the commercial purpose is clear differed widely.
a. On the question of whether there is an advertising subject to labelling, there was broad agreement only in the case of posts for which the influencer received a direct consideration from the linked company. These were generally considered by the courts to be advertising subject to labelling requirements (e.g. KG, GRUR-RR 2018, 155; OLG Frankfurt, MMR 2020, 43; OLG Karlsruhe, GRUR 2021, 88, 1474; OLG Cologne, GRUR-RR 2021, 167, 168). If, on the other hand, there was no consideration by the linked company, the courts’ opinions have so far differed.
On the one hand, the OLG Karlsruhe (GRUR-RR 2020, 452), for example, considered the mere “tagging” of photos to be advertising, even if there was no consideration (MMR 2021, 159). The OLG Braunschweig (GRUR-RR 2020, 452) went even further and held that, in case of doubt, all posts in a social media account were to be regarded as advertising subject to labelling requirements as soon as there were was only one individual posts for which the profile owner had received consideration or in which he advertised his own commercial activity.
On the other hand, the OLG Munich (GRUR 2020, 1096), for example, did not consider the mere “tagging” of products and the forwarding to the Instagram accounts of the respective manufacturers to be advertising subject to labelling requirements. The information on products, including the attached tags and links, rather belonged to the “editorial part” of the posts and thus primarily served other purposes than influencing the business decision of consumers.
b. The opinions in the case law also differed widely on the question of when labelling is dispensable because the advertising character of a post is clearly and unambiguously recognisable. While the OLG Hamburg (MMR 2020, 767) and the OLG Munich (GRUR 2020, 1096) had assumed that in the case of a verified account and a considerable number of followers, the advertising purpose of all posts was obvious to users, the KG (GRUR 2019, 543) had taken the view, that precisely the mixing of editorial statements and tags and links that qualify as advertising, which is typical for influencers, gives rise to the risk of misleading users and the need for clarification because advertising and editorial content blur.
3. In three proceedings, the German Federal Supreme Court has now for the first time dealt with the classification of postings as commercial communication and possible consequences, in particular the extent to which influencers, each with a high number of followers and regular posts, have violated the duty to label advertising with their Instagram posts. In all three proceedings, the plaintiff, an association for the protection of the commercial interests of its members (Verband Sozialer Wettbewerb e.V.), had filed claims against the influencers for injunctive relief and reimbursement of costs due to unlawful surreptitious advertising based on posts that were not labelled as advertising. In detail:
a. Case I ZR 90/20 – Influencer I (Luisa-Maxime Huss)
Here, the court had to shed light on the question of the extent to which a posting on an Instagram account in favour of a third-party company had to be regarded as advertising and thus had to be marked as such. Insofar as a consideration is paid for the posting of the contribution (as in the present case), the question can be answered unambiguously: such a posting is to be qualified as advertising and must be marked as such accordingly (Sec. 5a para. 6 UWG/Sec. 3a UWG in conjunction with. Sec. 6 para. 1 no. 1 TMG as well as Sec. 58 para. 1 sentence 1 RStV or Sec. 22 para. 1 sentence 1 MStV).
The posting in question was not marked as advertising. After the lower courts had upheld the action, the appeal was unsuccessful.
b. Case I ZR 125/20 – Influencer II (Cathy Hummels)
In the second case, the dismissal of the action by the OLG Hamburg (Case No. 15 U 142/19) was confirmed by the Federal Supreme Court. Here, the constellation was such that no consideration was paid by the manufacturer whose products were “advertised” in the context of the posting.
In such a case, the post would only be regarded as advertising and labelled as such for reasons of fairness “if the post is excessively promotional according to its overall impression, for example because it solely praises the advantages of a product of this company without any critical distance in such a way that the presentation leaves the frame of factually prompted information”. According to the BGH, it is not decisive for this whether product images are provided with so-called “tap tags”, which merely identify the manufacturer’s products. However, there was an advertising surplus if, in addition to the “tap tag”, there was a link to the website of the manufacturer of the product depicted, as in the present case. However, this had no effect on the labelling obligation. For as far as statements promoting sales – be it for one’s own company or for third parties – are clearly recognisable as commercial communication or advertising in a posting and no consideration is given, the conduct (in the case) of the posters satisfies the aforementioned labelling provisions of Sec. 6 para.1 no. 1 TMG. The provisions under the TMG are sector-specific special provisions that limit the scope of application of the provision under Sec. 5a para. 6 UWG. Cathy Hummels’ Instagram account is operated – recognisably for consumers due to her high profile and high number of followers – for image cultivation and therefore for purely commercial reasons. There was no consideration for the third party products shown and linked in the posting. Therefore, no separate labelling was required.
c. Case I ZR 126/20 – Influencer III (Leonie Hanne)
In this case, the dismissal of the action by the lower courts (lastly OLG Munich, Case No. 29 U 2333/19) was confirmed. Although the postings of the Instagram account holder, similar to the aforementioned facts, constituted business acts in favour of her own company and, possibly, also in favour of other companies, the commercial purpose of the postings were clearly recognisable from the overall circumstances. As far as the commercial acts in favour of third party companies are concerned, the assumption of a violation of Sec. 5a (6) UWG was ruled out, since – as in the BGH decision Influencer II – no consideration was received, the postings complied with the overriding special provisions of Sec. 6 para.1 no. 1 TMG, Sect. 58 para. 1 sentence 1 RStV and Sec. 22 para. 1 sentence 1 MStV and no other violation of UWG provisions could be established.
4. Seemingly private posts in social media can certainly be of a business nature and qualify as entrepreneurial activity. This is not changed by the fact that otherwise only private posts are published on an Instagram account. Posts by a person working as an influencer with a higher number of followers will, in case of doubt, always be qualified as business activities for the benefit of one’s own company. This is because marketing and expanding one’s own reach increases the market value for third-party companies that see and use influencers as a marketing tool.
While the German Federal Supreme Court did not deal with the question of when the line between an activity as a private person and an activity as an entrepreneur is crossed, at least a few parameters are now fixed regarding the question under which conditions posts are to be marked as advertising for one’s own or another’s business activity, especially if the primary purpose of a post is to promote the sales of a third-party company. For the viewer of a post, any commercial purpose pursued with an act of communication must be clearly and unambiguously recognisable.
5. On the basis of the regulatory proposal published by the German Federal Ministry of Justice and Consumer Protection (“BMJV”) on 13 February 2020 on the delimitation of non-commercial communication for information and opinion forming from commercial acts (influencers), a government draft was published on 20 January 2021 replacing Sec. 5a para.6 UWG, which is primarily applicable to such circumstances, with a Sec. 5a para. 4 UWG (“Draft Act to Strengthen Consumer Protection in Competition and Trade Law”). According to this, only posts that are made in return for payment or other consideration must be marked as “advertisements”. This is intended to prevent over-obligatory labelling of posts in social media. Such labelling is seen as a danger for the consumer: If all posts of an influencer – even those without any product reference, which clearly originate from the private sphere – were declared as “advertisement” or had to be declared as such, consumers would no longer take the intended warning against advertising content seriously and would find it more difficult to distinguish between editorial and advertising content. One would then have deception through over-labelling. However, this law will not come into force until May 2022.
6. Since the aforementioned decisions of the German Federal Supreme Court are landmark decisions, they will continue to apply even after the amendment to the German Unfair Competition Act comes into force. Essentially, the regulations already implemented under telemedia law will be incorporated into the UWG.
In the case of postings about products for which there was a consideration from the manufacturer, the posting must therefore always be marked as advertising, and in such a way that is obvious at first glance and beyond doubt. We recommend the permanent display of the designation “Advertisement” or – depending on the choice of language and, if applicable, the target audience – the equivalent word in that language in a font size that can be read on the usual end devices and in an appropriate contrasting colour to the background. If the notice is only given when one clicks on a “tap tag”, this is too late. A labelling obligation is only dispensable when only the services/products of the influencer, i.e. the influencer’s own business, are promoted.
Insofar as third parties profit from the posting and no consideration is given, a distinction must be made from a competition law perspective as to how far this is obvious to the consumer due to the overall circumstances. Insofar as this is not obvious, but there is a direct link to the offer of the third party company by means of tap tags, a corresponding labelling as advertising would also have to be made in accordance with the provisions of the German Unfair Competition Act. This is only unnecessary in the case of completely obvious advertising for third parties. However, the aforementioned labelling obligation does not apply under the TMG, which is primarily applicable, due to the lack of consideration.
In conclusion, it remains to be noted that the legal questions and pitfalls have not been completely clarified or eliminated with the aforementioned decisions; however, they have been reduced to borderline cases for which case law will certainly work out further guidelines, at least until the next amendment of the UWG or TMG, which should be initiated by a corresponding EU directive. To push forward with national regulations in a ubiquitously accessible media space would certainly run counter to an EU-wide, uniform regulation.
