In a judgment of 17 May 2018, case no. 6 U 3815/17 (“Judgment”), the Court of Appeal Munich (Oberlandesgericht München – “Court of Appeal”) held that online retailers are required to indicate a precise delivery time on their website where consumers purchase products. A ‘coming soon’ notice is insufficient, even where the relevant product has not yet been released. The Judgment was published on 9 July 2018 by the German consumer protection association Verbraucherzentrale Nordrhein-Westfalen, which had initiated the court proceedings (“Plaintiff”). The Plaintiff’s accompanying press release of 9 July 2018 can be found here (in the German language).
In 2016, the Plaintiff initiated court proceedings against a major German online retailer (“Defendant”). The Defendant had offered on its website to customers a new smartphone that had not yet been released by the manufacturer, placing the following notice on its website: “The item will be available soon. Secure your device now!” (Original German wording: “Der Artikel ist bald verfügbar. Sichern Sie sich jetzt Ihr Exemplar!”).
In its first instance judgment of 17 October 2017, case no. 33 O 20488/16 (“First Instance Judgment”), the District Court Munich I (Landgericht München I) held that the Defendant was in breach of its statutory information obligations on distance selling contracts under the German Civil Code (Bürgerliches Gesetzbuch – “BGB”).
The Defendant appealed against the First Instance Judgment. In the Defendant’s view the District Court Munich I had misinterpreted the specifics of the e-commerce sector. In particular, it argued that the relevant target group of consumers was technically savvy, and wished to purchase a specific new device. They would, therefore, have very much appreciated receiving the device immediately upon release, i.e., once it had arrived at the retailer. The Defendant argued that offering products that have not yet been released to interested consumers was considered good service. Furthermore, the Defendant highlighted that innovative consumer electronic devices are often sold out within hours, so consumers might need to secure such items even prior to their availability at retailers. Finally, the Defendant emphasised that this pre-release selling method was common practice across the entire industry.
The decision of the Court of Appeal
The Court of Appeal dismissed the Defendant’s appeal and expressly upheld the First Instance Judgment. In particular, it took the view that the Defendant was in breach of its statutory information obligations under sections 312d(1) s. 1 BGB and article 246a § 1(1) s. 1 no. 7 of the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch – “EGBGB”). These provisions transpose into German law article 6(1)(g) of the EU Consumer Rights Directive 2011/83/EU, which requires traders to provide the consumer, in a clear and comprehensive manner and before the consumer is bound by a distance or off-premises contract, with information on “the arrangements for payment, delivery, performance, the time by which the trader undertakes to deliver the goods or to perform the services and, where applicable, the trader’s complaint handling policy”.
The Court of Appeal stressed that stating that the device will be available “soon” (German: “bald”) is not sufficiently clear and transparent since the actual delivery date (or period) remains unknown to consumers, and there is no way for them be sure of the date. Consequently, they are unable to make a claim if the trader defaults and fails to deliver the purchased device.
The Court of Appeal did not accept the Defendant’s arguments relating to the specifics of the e-commerce sector. Instead, it took the view that the unspecified indication of the delivery date was aimed at the public as a whole and not just to a limited group of targeted, i.e. particularly technically savvy, consumers.
The Court of Appeal has not admitted cassation appeal proceedings by the Defendant before the court of cassation, the Federal Supreme Court (Bundesgerichtshof – BGH), and, according to press articles, the Defendant has not filed a complaint against the denial of its cassation appeal. Accordingly, the Judgment should be considered final and absolute as between the parties.
What does this mean for online retailers?
Although the Judgment relates to the purchase of a smartphone by way of a distance-selling contract, it will also have an impact on offerings of non-tangible goods and services, such as video games, which are often sold in advance of their unfixed release date. The relevant provisions of the BGB and the EGBGB are not limited in scope to tangible goods.
Online retailers that continue offering goods or services to consumers residing in Germany on a ‘coming soon’ basis face the risk of being sued by not only consumer protection associations but also competitors. The background is that the relevant statutory provisions of the BGB and the EGBGB qualify as market behaviour rules under the German Act against Unfair Competition (Gesetz gegen den Unlauteren Wettbewerb – UWG), which also protects competitors.
Online retailers should review all offers that target consumers in Germany. Unspecified delivery dates should be avoided, in particular where goods are offered prior to their release date.
The Court of Appeal itself suggests that, where the release or availability date remains uncertain, online retailers could restrict their offerings to consumers to non-binding pre-orders; at the least, a consumer’s bank account or credit card should only be debited once any goods ordered have been delivered.