This is a guest article by Sandra May, Legal Content Team leader at the Händlerbund, on the topic of eCommerce law in 2021.
2021 is set to be very exciting for eCommerce, from both a legal and a political perspective. Alongside several laws that are set to be amended this year, the way is also being paved for 2022. However, let us first take a look back at 2020:
So, that was (the eCommerce legal situation in) 2020!
2020 can be summed up in a single word: ugh! The past year has been dominated by the coronavirus pandemic and the associated lockdowns. Nevertheless, there were also a number of events that will continue to shape online trade, irrespective of the pandemic.
Act for the Promotion of Fair Competition
After a two years, the long-awaited Act for the Promotion of Fair Competition finally came into effect at the beginning of December. The act is intended to reduce the economic incentive for the issuance of warning notices. Essentially, this is a good thing – that said, the act is garnering a great deal of criticism. For instance, associations such as the Ido-Verband, a lobby group for the legal and financial consulting of German online companies, can continue on, almost exactly as before. Whether the act will actually reduce the number of chargeable warnings issued remains to be seen during the year ahead.
Federal High Court of Justice on Liability for Customer Reviews
The starting point for the dispute was a statement made by a customer in an Amazon review. The customer claimed that the kinesiological tape he had purchased had helped with his condition. These were statements that the retailer had never been permitted to make, as they fell under the umbrella of so-called health claims. This resulted in a warning being issued. The Federal High Court of Justice had to clarify whether retailers are liable for statements in customer reviews. Judges responded to this question in the negative, as review content on Amazon is displayed in an area distinctly separate from the retailer’s offering, and as such it is clear that statements made there do not originate from the seller.
What do online retailers expect in 2021, from a legal and political perspective?
The crucial question this year is this: will we see the introduction of package tax for online trade?
For several years, if not decades, online trade has been held responsible for the death of the city centre. Two lockdowns only served to fan the flame with regard to this debate. “Don’t buy online!”, was the request issued by many politicians, with a number of specific demands also issued.
Whether online tax or package tax – ideas take on many different names, however, the intent and purpose are the same: because online trade has also made use of inner city infrastructure, it should pay extra for this privilege. Monies collected in this way should then be earmarked for investment in city centres, with a view to restoring their consumer appeal. We will see this year whether such a provision will actually be adopted. What is certain, is that the second, more sustained lockdown is undoubtedly providing fuel for the fire in the discussion.
New energy efficiency labels
We could see this change coming… For several years now, it has seemed as though an increasing number of benefits have been attributed to the A energy efficiency class rating. However, this year will see this come to an end, with a new classification to be introduced. As such, a device that is currently classified within the A+++ class could in future find itself in classes C, D or E.
The new labels are to apply for dishwashers, washing machines, tumble dryers, fridges and freezers, as well as televisions and monitors, from 1 March 2021. Retailers will be granted a transition period, to run until 18 March 2021. For lamps and light fittings, the new energy efficiency classes are to apply from 1 September 2021.
EU: Discontinuation of the 22-Euro tax exemption limit and introduction of the One-Stop-Shop.
It has long been a source of complaint that so-called small consignments up to the value of 22 euros could be imported into the EU from third-party countries, tax-free. This tax exemption limit is to be dispensed with from 1 July 2021. Instead, imports are to be taxed from the very first cent.
Another new addition is the One-Stop-Shop procedure, to come into effect from 1 July. This should make the settlement of tax for sales in other EU countries simpler than before. Instead of having to pay taxes separately in each country, these will in future be reported and paid centrally via the Federal Central Tax Office in Germany.
This will also be accompanied by the standardisation of the de minimis threshold to 10,000 euros.
The changes had actually been scheduled for 1 January 2021, however, they were pushed back on account of the coronavirus.
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The TTDSG – Germany’s own ePrivacy regulation
With the long wait for the ePrivacy regulation well documented, Germany is leading the way and, among other measures, hopes to regulate the use of cookies through its own Telecommunications and Telemedia Data Protection Act (Telekommunikations-Telemedien-Datenschutzgesetz, TTDSG). Alongside the granting of consent to cookies, it will presumably also stipulate rules governing devices such as language assistants, which can be used for wiretapping, as well as regulating the use of location data.
One thing is already clear: when it comes to cookie banners, the planned law will provide enhanced legal certainty. As yet, it remains unclear as to exactly how a legally watertight banner should now look.
Sale of goods and digital content
The EU has two directives in the pipeline. Firstly, there is talk of a directive on the movement of goods, and secondly, of a directive for digital goods. Germany already produced draft bills for the implementation of both directives in January 2021, which will come into force for trade in the coming year.
The objective of the directives is clearly consumer protection. For instance, the time limitation for invoking a shift in the burden of proof in the case of a material defect is to be extended from the previous six-month term to a full year. This means that the consumer will simply have to prove that the goods have a fault within the first year after the purchase. It will be upheld by law that this fault was already present at the time of purchase, and the retailer shall be held liable for it. If the retailer differs in opinion, he or she must prove that the goods were free of defects at the time of sale.
Expected ruling of the Federal High Court of Justice: to what extent can retailers be held liable for manufacturer warranties?
Those mentioning warranties in their advertising must also provide information regarding the terms and conditions. This is also a highly logical step, since, unlike with a guarantee, the issuer of warranties is free to define the conditions. For example, regular maintenance can be a requirement.
This information obligation also applies if an online retailer provides information regarding the existing manufacturer’s warranty. The retailer can comply with this obligation by providing a link to the corresponding manufacturer’s website. Until now it has been unclear as to the extent to which retailers can be held liable when insufficient information is provided by the manufacturer.
The case, which the Federal High Court of Justice is to rule on in February, must clarify precisely this issue. An online retailer provided a link to the manufacturer’s PDF under the title of “Operating Manual”. There, the manufacturer also made reference to its own warranty; however, it did not provide information on all aspects of this warranty. Consequently, a competitor issued a written warning to the online retailer.
The case is an exciting one, as it will provide legal clarity. There is still hope that the Federal High Court of Justice will decide in favour of the online retailer. A contrary decision would result in retailers having to in future conduct highly detailed checks as to which information material can be used by the manufacturer.
Brexit and the free trade agreement
Prior to the turn of the year, the Brexit agreement was still a matter that raised many question marks. Nonetheless, government leaders have finally reached a free trade agreement, meaning that, for the time being, there will be no dreaded customs duties to worry about. However, the agreement does not alter the fact that customs checks will in future be conducted at borders.
For German online retailers, this may bring with it an associated increase in bureaucracy, as a customs declaration will have to be submitted. Retailers that do not have a branch office in the UK even require an official customs representative for this purpose.
In addition, the customs exemption only applies to products from the EU. If individual components originate from third-party states, they will then be subject to customs duties.
All in all, the coming year is set to be an interesting one with regard to exports to the UK. For instance, the British have announced that from July 2021, the CE label will no longer be sufficient for the import of products. In its place, the UKCA Label is to be used. However, this will not simply replace the CE label, but rather may involve other requirements for individual product groups.
From a legal perspective, sales to Great Britain will be somewhat of an unknown: previously, online retailers could apply the same terms & conditions as they use for trade within Germany. However, this will change with the UK’s departure from the Union. In future, those who wish to sell to the UK will be forced to grapple with British law. This of course also applies for trade via platforms, such as Amazon.uk.
The Händlerbund is here to help!
Ensuring the legal protection of their online presence involves a huge amount of work for many online retailers. The Händlerbund is available to assist you, as your competent partner for any legal queries you may have. Find out more now!
About the author
Sandra May has been writing for OnlinehändlerNews as a legal expert since September 2018. During her studies, she specialised in the field of competition and copyright law. After completing her legal clerkship, she took the rather unconventional leap into journalism. Explaining legal issues in clear terms that are understandable to the layperson is right up her street.
