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Fair Competition Act, misses mark

September 30, 2020

For years, online retailers have been complaining about the problem of legal abusive warnings, which put the fairness of competition to the test and bring those affected to the limits of their resilience through a lot of effort and high costs.

In 2018, the politicians recognised the problem: A change in the law was demanded that would finally put a stop to this. The Händlerbund has also advocated a change in the law and outlined the difficulties for online retailers in statements and in discussions with decision-makers.

After two years of negotiation: The law to strengthen fair competition has passed the Bundestag. Comprehensive changes to the law against unfair competition (UWG) are intended to put an end to the business model of warnings under competition law. The Händlerbund sees the target has been missed and warns of drastic long-term consequences through the trivialisation of warnings.

The Händlerbund welcomes the fact that the widespread abuse of warnings has reached politics. The dealer association also had success with the long-demanded abolition of the flying jurisdiction. Andreas Arlt, CEO of the Händlerbund, said: “Warnings issued because of small errors on the homepage are one of the biggest worries of every online retailer. The amendment to the law is well meant but not well done. We continue to fear mass warnings and high fines against online retailers.” In the opinion of the dealer association, which represents 80,000 online presences, the law misses the mark.

Interest groups or consumer associations issue the majority of warnings and are not taken into account in the new draft law. The Händlerbund said that an association known in the industry, which has already been certified several times for the abuse of rights by court decision, only has to overcome a small hurdle in future to continue issuing warnings on a large scale.

“It remains to be seen how the courts will judge each individual case. Warning market participants will argue that they can still charge legal fees for the alleged violation. So there is still a long way to go before the courts create legal clarity,” said Arlt.

In the end, those who avoid going to a lawyer or court for cost reasons will be left behind. After all, the abolition of the flying place of jurisdiction, which has long been fought for by the traders’ association, makes business difficult for the mass warnings.

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