Regional Court of Cologne: Strict formal requirements for the withdrawal rights waiver for digital content
Published on 15th Aug 2019
In a recent court decision (which is still subject to appeal), the Regional Court of Cologne dealt with the formal requirements for obtaining a waiver of consumers’ withdrawal right in the contracts for the sale of digital content. The court subscribes to a very strict interpretation of the statutory requirements. In the opinion of the judges, it should not be possible to combine the waiver with the consumer’s statement leading to the formation of the contract as such. In doing so, however, the court contradicts a decision of the Higher Regional Court of Karlsruhe.
Consumers in the EU generally have a 14 day withdrawal right for any contracts concluded online (sometimes referred to as a “cooling off” period). When this consumer right of withdrawal was extended to digital content under the Consumer Rights Directive, the EU legislator did recognize that in many cases, a piece of digital content (such as a single use virtual item in an online game) fulfils its purpose within a very short period of time and cannot be "returned" like a tangible good. In order to prevent the abuse of the consumer withdrawal right, it has given providers the opportunity to obtain a waiver of this right prior to delivering the digital content. The formal requirements on how this waiver needs to be made, however, are sometimes interpreted by the courts with a severity that borders on the impractical.
On a distribution platform for digital content, the provider had indicated directly above the "Buy" button that by clicking this button, the user was also giving consent that the order would be executed immediately and the user would thus waive their withdrawal right. The notice was displayed in a font size similar to that on the purchase button itself.
Nevertheless, after an unsuccessful cease and desist letter, the private consumer watchdog group Verbraucherzentrale NRW filed a complaint against the provider for injunctive relief, arguing that this design did not constitute an effective waiver, which of course also made the information as such ("After clicking on "Buy" there is no withdrawal right") inaccurate and thus illegal.
The court agreed with this reasoning (Regional Court of Cologne, judgment of 21 May 2019, docket no. 31 O 372/17). According to the provision of Sec 356 (5) of the German Civil Code (Bürgerliches Gesetzbuch – BGB), an "express" consent of the consumer is required in order to extinguish the right of revocation.
According to the judges, this provision has to be understood in the sense that, in addition to the consumer's declaration of intent to conclude the contract on the digital content, a further, separate declaration was to be made, at least by actively ticking an appropriate checkbox. Otherwise, it was not guaranteed that the consumer would really think about the consequences of their decision, because only the act of "buying" was at the top of their mind.
Also, the court argues that the concept of "express consent" had to be interpreted in the same way as the express consent requirement in a different section of the German Civil Code, dealing with paid optional services – for such optional add-ons, Sec. 312a (3) sentence 2 BGB expressly prohibits pre-ticked checkboxes and similar default settings.
In fact, the court in Cologne is in line with the Regional Courts of Berlin (judgment of 30 June 2016, docket no. 52 O 340/15) and Karlsruhe (judgment of 25 May 2016, docket no. 18 O 7/16); the latter going even further and requiring that the withdrawal waiver declaration be made after the “buy” button has been clicked.
From our point of view, the arguments of the Regional Court have some weaknesses. It is not clear why the court considers it impossible for a consumer to perceive an information text placed directly above the "Buy" button and to mentally deal with it – especially since consumers today are used to finding the essential (!) contents of the contract in the vicinity of the “buy” button, and to reviewing them again before making a purchase.
The comparison between the provisions of Section 356 (5) BGB and Section 312a (3) sentence 2 BGB is also flawed, since the latter provision contains express language prohibiting the use of default settings (pre-checked boxes) and the former does not.
In contrast to the Regional Courts in Cologne, Berlin and Karlsruhe, the Higher Regional Court of Karlsruhe also saw the matter differently. In a decision that has since become final (OLG Karlsruhe, judgment of 11 July 2018, docket no. 6 U 108/16), while it did not consider the concrete design of the waiver process sufficient in the case it decided, the court expressly affirmed the possibility of a combination of both declarations (the contract formation and the withdrawal right waiver), as long as the waiver language was displayed in a sufficiently "prominent" way. It states verbatim (translation ours):
A legally compliant design that actually leads to the expiry of the right of revocation is technically possible without further ado. [Possibilities include] a more prominent emphasis of the circumstance that the activation of the button "buy now" does not only result in a contract establishing payment obligations, but also in the renunciation of an existing right of withdrawal by means of the consent to immediate execution.
It is still unclear how a provider of digital content can make a practical and legally safe use of the provision on waiving the withdrawal right. The ruling from Cologne is still subject to appeal. The case therefore offers the chance of a clarification, which may ultimately have to come from the Court of Justice of the EU.
In the meantime, providers who wish to implement a waiver of the withdrawal right should exercise caution and, when in doubt, obtain waivers by means of separate checkboxes or pop-ups.