The courts are increasingly dealing with influencer marketing and are meeting with a broad public interest due to the sometimes prominent parties. The District Court [Landgericht] Karlsruhe just recently decided that also in the case of supposedly private photographs, there is necessary to mark them as advertising.

Background

A well-known German influencer – this refers to persons who are particularly important as advertising media due to their popularity and presence in social networks – had posted supposedly private photographs through her business account on the Instagram platform which is popular for photographs and video clips. Upon clicking on the photographs, so-called tags, i.e. links leading to accounts for brands, became visible. For example, a photograph showed the influencer during a vacation in front of a hotel. One of the tags then led to the corresponding hotel account without this having been marked as advertising. The influencer, which has approximately four million followers, apparently did not receive any consideration for this. In general, the influencer, according to her own statements, is paid for approximately 50% of her postings in the network.

Decision of the District Court Karlsruhe

The District Court Karlsruhe considers the posts to be unfair because they are a misleading commercial practice, and the District Court ordered the influencer to refrain from such business conduct in social media if the commercial purpose of the publication is not marked. In other words: The court was of the opinion that this constituted prohibited surreptitious advertising (Section 5a para. 6 German Act Against Unfair Competition [Gesetz gegen den Unlauteren Wettbewerb, "UWG"). 

A material point of dispute involved the issue of whether the posts constitute a commercial practice. The Influencer was of the opinion that she was only acting in a private capacity and that the links satisfied the interest of her followers in having information and were supposed to avoid subsequent questions. The UWG defines a commercial practice as any conduct by a person for the benefit of the own business or the business of a third party before, during or after conclusion of a transaction which objectively is related to promoting the sale or the procurement of goods or services (…) (Section 2 para. 1 no. 1 UWG). The District Court accordingly held that the posts served, on the one hand, to promote the business of third parties. The court held that the alleged private nature of the photographs did not prevent this. Instead, it was held to be inherent in influencer marketing that the own image and getting the followers involved are always related. The fact that the links are supposed to prevent further questions was held to not to change the situation. They were also not held to be merely editorial contributions which did not serve primarily to provide information and develop an opinion.

At the same time, the Court held that the influencer was also promoting her own business, so that payment for the individual posts was not determinative. The court held that she generates income by marketing products in the posts while appearing to act with authenticity, anyway. Therefore, the unpaid posts were held not to be purely private and were instead posts which appeared to be private in order to serve the authenticity and the maintenance of the own image. An influencer who exclusively engages in advertising, however, was held to endanger authenticity and image. The Court held that a private account can be used for private posts.

Since probably not all users are aware that they are dealing with an influencer and that the influencer's appearances generally have the nature of advertising, it was held that the requirement to mark the posts as advertising was not avoidable. Instead, it was held to be apparent upon merely viewing and image that advertising is involved, particularly since the influencer speaks in part to minors, who are users particularly requiring protection.

Finally, the court held that the influencer is not impaired in her freedom of expression and freedom to use the media as a result of the prohibition. Since the influencer is not generally prohibited from advertising, i.e. placing posts, and instead only having them marked as advertising is being required, the court held that the principle of proportionality was complied with.

Comment

Influencer marketing was initially often considered as a “legal vacuum”, but, in the meantime, an awareness for the duties to mark as advertising has developed. However, there is still uncertainty about "whether" and "how" the proper marking should be. The decision of the District Court Karlsruhe will probably heighten the fundamental uncertainties in the industry. While the Court of Appeals [Kammergericht, "KG"] Berlin had previously held that there is no general duty to mark as advertising, especially in the case of contributions without consideration and with only editorial content, the judgement of the District Court Karlsruhe points in another direction (although it also addressed the issue about whether editorial content was involved). The next rounds have already started: In a similar case involving the wife of the former national footballer Mats Hummels, the decision recently was in her favor. In addition, the Federal Ministry of Justice and Consumer Protection [Bundesministerium der Justiz und für Verbraucherschutz, “BMJV”] has announced its plan for legislative clarifications. However, some time will still pass until then or until the questions reach the Federal Supreme Court of Justice [Bundesgerichtshof, "BGH"]. Therefore, it is recommended to make extensive use of marking with regard to avoiding risks. Companies that advertise with influencers should impose on the influencers an obligation to comply with the rules.

(District Court Karlsruhe, judgement dated 21 March 2019, case: 13 O 38/18 KfH)

Benedikt Beierle, Attorney
Düsseldorf