Although a recent Federal Supreme Court judgement said a ‘No shipments to Germany’ disclaimer on a Dutch website selling pharmaceuticals was not effective to oust German jurisdiction, the judges’ reasoning suggested such disclaimers might with special care work.
Topic: Online Advertising
Who: An Online Pharmaceuticals Dealer from the Netherlands
Where: The Federal Supreme Court, Karlsruhe, Germany (Ref.: I ZR 24/03)
When: March 30, 2006
A Dutch company selling pharmaceutical products online had been accused of selling drugs in Germany without the necessary approval pursuant to the Pharmaceuticals Act (Arzneimittelgesetz, AMG). The website's welcome page had offered a choice between an English language and a German language version of the online shop. The German language version had been accessible by clicking on the image of an Austrian flag or the headline "German-speaking Europeans", next to which a short disclaimer had stated that no shipments could be made to Germany.
However, on at least two occasions, shipments had been made to Germany, and in the German language version of the online shop, prices had been indicated in Euros and in Deutsche Mark.
The Higher Regional Court of Berlin (Kammergericht) had dismissed the defendant's argument that German courts were incompetent and German law inapplicable to the website due to the disclaimer on the welcome page, and had ruled against the defendant on the basis of the Pharmaceuticals Act and the Unfair Competition Act.
The Federal Supreme Court upheld the ruling. In its decision, the court stated that serious disclaimers could limit the area of circulation of an online advertisement, excluding the competence of German courts and the application of German law. Such disclaimers, however, would have to be formulated without ambiguities, clearly display serious intentions and be respected by the company. Concerning the case at hand, the court found that since the company had shipped pharmaceuticals to Germany despite the disclaimer and since the prices were indicated in (former) German currency, the disclaimer was obviously not serious, and thus without legal significance. Therefore, the German courts were found competent, and German law was found applicable due to the fact that the website had impacted competition in Germany.
Why this matters:
Since online content is usually meant to be accessible from any geographical location, German courts routinely accept their competence and the application of German law to any online content that might be challenged before them. This decision suggests a possibility to avoid the risk of litigation in Germany concerning such content that, while possibly illegal in Germany, honestly does not target German users or customers.