Publication of sponsored articles without proper marking constitutes an act of unfair competition provided for in § 4 no. 11 UWG

The Federal Court of Justice of Germany (BGH) considered a case in which the publisher of newspaper from Stuttgart sued the publisher of advertising journal who put into print sponsored articles, marked with words “sponsored by”, but not separated from other publication materials by marking “Announcement”, what was contrary to § 10 of Press law of Baden-Württemberg. The claimant asserted that such actions constitute not only an act of unfair competition but also an unfair business practice and violates the rights of press readers as consumers.

In the judgment of 6^th February 2014, BGH ruled that § 10 of the Press law of Baden-Württemberg, which states that the press publisher, who obtains, demands or accepts a promise of remuneration for given publication is obliged to mark such publication with distinct information “Announcement”, unless its layout or concept allows readers to recognize its advertising character instantly, is the legal rule, which regulates market activity understood as in § 4 no. 11 of the German Unfair Competition Act. Therefore, violation of this regulation by the press publisher constitutes an act of unfair competition.

According to § 4 no. 11 of the UWG, an act of unfair competition is constituted by actions violating the provisions of the UWG regulating market activity in order to protect the interest of market participants.

BGH asserted that obligation, which is provided for in § 10 of the Press law of Baden-Württemberg, is designed not only to prevent readers from being misled but also to ensure objectivity and neutrality of the press. Therefore, it is also the interest of other participants of the press market.

It is of note, that in the scope of the proceedings, BGH addressed a prejudicial question to the Court of Justice of the European Union concerning consistency of § 10 of the Press law of Baden-Württemberg with regulations of the Directive of European Parliament and Council 2005/29/WE of 11^th May 2005 concerning unfair business practices committed by entrepreneurs towards consumers on the internal market.

In the judgment of 17th October 2013 (file ref. C 391/13 RLvS Verlagsgesellschaft mbH / Stuttgarter Wochenblatt GmbH) the Court of Justice of the European Union ruled that regulations of the Directive are not applicable to press publishers. The aim of the Directive concerning unfair business practices in such circumstances is not the protection of competitors of the publisher who publish sponsored articles advertising products or services of the sponsor without marking “Announcement”. Therefore, press publishers are not entitled to invoke regulations of the Directive in their business to business relations, because these regulations are devoted to protect consumers.

However, it is not against the Directive to apply the national regulation requiring press publishers who obtain, demand or accept a promise of remuneration for given publication to mark such publication with distinct information “Announcement”, unless its layout or concept allows readers to recognize its advertising character instantly.

• Judgment of the Federal Court of Justice of 6^th February 2014, file ref. I ZR 2/11
• Judgment of the Court of Justice of the European Union of 17^th October 2013, file ref. C-391/12