German Federal Court of Justice confirms Runes of Magic decision


September 18, 2014 Leave a comment
This morning, the German Federal Court of Justice (the highest German civil court; “BGH”) has confirmed its July 2013 “Runes of Magic” decision (docket no. I ZR 34/12), banning an advertisement for in-game items allegedly targeted at children. This decision will likely have a considerable impact on anyone advertising and selling goods or services online.

Legal Background

In its earlier decision, the court, following the arguments of a consumer watchdog organisation, had ordered the operator of a game to refrain from using the contested ad, which included the line

“Seize the advantageous opportunity and add that certain something to your armour & weapons”.

The BGH saw this language as an illegal direct exhortation to children to buy the relevant items. In making this finding, the court relied on the address with the German informal “you” (the German language has different words and grammatical constructions for “formal” and “informal” address, the latter being commonly used for family, close friends and children) and the use of other words it considers typical for children’s speech.

Therefore, the court BGH found the advertisement to be illegal commercial practice under § 3 para. 3 of the German Act against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb; “UWG”) in connection with no. 28 of the appendix to the UWG (the so-called Black List).Under this no. 28 of the Black List, it is an illegal commercial practice to include in an advertisement a direct exhortation to children to buy advertised products or services or persuade their parents or other adults to do so. This provision is based on an EU directive on unfair commercial practices (Directive 2005/29/EC of May 11, 2005), which also contains such a Black List with almost identical provisions.

Criticism

The earlier judgment hat been criticized in legal literature for its formal flaws and tenous interpretations of the term “Child” under EU law and its consideration that informal speech – nowadays very common in online communication among adults – automatically indicated a target audience of minors under 14 years of age.

The court today did not comment on the reasons for its judgment. While the judges could technically take up to 5 months to issue the written reasons, we expect to have them in a matter of a few weeks in this particular case.

Action Items

In the meantime, our intial guidance on how online vendors and service providers should react now applies more than ever:

  • Exercise even greater care should be exercised in making advertising language legally compliant. Direct purchase invitations to children should be avoided at all costs. The selection of available payment methods seems to play a certain role in the legal analysis.
  • Where terms and conditions state a minimum age, it might be argued that ads for in-game items cannot be targeted at younger individuals.
  • Terms and conditions (and privacy policies) need to be adapted to German law. Merely translating “universal” terms is not a solution.
  • Advertisements within or with regards to a game and the embedding of advertisements as such should be legally vetted and, when in doubt, worded more carefully (indirectly).
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Konstantin Ewald

Konstantin Ewald

Partner at Osborne Clarke
Konstantin Ewald is a Partner and Head of Digital Business at Osborne Clarke, Germany. He advises leaders in the digital media and software industry throughout Europe and the US on all matters of digital media and IT law as well as IP/technology-related transactions.

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