Germany updates

Aviation

Contributed by Arnecke Sibeth
Unaffected flights cannot be used in calculation of compensation payments
  • Germany
  • December 06 2017

A recent Erding Local Court case called into question the distance that must be taken into consideration when calculating compensation according to Article 7(1) of EU Regulation 261/2004. The court interpreted Article 7 in line with settled case law and held that only the disrupted flights that had affected the overall delay of the passenger should be included in the calculation of the distance. Therefore, where a reservation consists of several flights, these are to be considered separately.

No compensation for rescheduling airway slot
  • Germany
  • November 29 2017

In a recent case, the Cologne Regional Court ruled that if the flight in question was delayed due to a Eurocontrol rescheduling of its airway slot, passengers had no right to compensation pursuant to EU Regulation 261/2004, irrespective of whether the rescheduling was based on reasons which, when considered individually, would result in extraordinary circumstances.

Will Berlin Tegel Airport remain open?
  • Germany
  • October 18 2017

A recent non-binding referendum asked Berlin citizens whether they should demand that the Senate give up its closure intentions and take all measures necessary to ensure the indefinite operation of Berlin Tegel Airport. The vote indicates that approximately 56% of Berliners voted 'yes' and support keeping Tegel open. Local politics must now find a way to deal with Berlin's wish to maintain two airports.

No compensation for cancellation after re-routing
  • Germany
  • September 20 2017

The Dusseldorf Local Court recently decided that passengers do not have a right to compensation if, according to the meaning of Articles 7(2) and 8 of EU Regulation 261/2004, an alternative flight is cancelled. The court argued that the regulation differentiates between a 'flight' as subject of the transportation contract and an 'alternative flight' as a measure of assistance. Consequently, the cancellation or delay of an alternative flight gives no right to compensation.

ECJ upholds passengers' rights over additional fees
  • Germany
  • September 06 2017

The Berlin Regional Court recently upheld the application of a private German association for the advancement of consumer rights, which claimed that a German air carrier's online booking system had violated EU Regulation 1008/2008. Following the dismissal of the appeal brought by the carrier before the Berlin Upper Regional Court, the airline lodged a remedy of review before the Federal Court of Justice, which stayed the proceedings and referred the case to the European Court of Justice for a preliminary ruling.


Banking

Contributed by Herbert Smith Freehills Germany LLP
Are arrangement and processing fee clauses in commercial loan agreements invalid?
  • Germany
  • September 08 2017

The Federal Court of Justice recently issued two rulings declaring that processing fee clauses in standardised commercial loan agreements are invalid as they unreasonably disadvantage borrowers. Previously, the majority of lower German court rulings had upheld the validity of such clauses in commercial loan agreements. Going forward, lenders have a number of options to deal with the issues raised in these new court decisions.


Competition & Antitrust

Contributed by CMS
Ninth amendment of Act Against Restraints of Competition
  • Germany
  • June 15 2017

The Federal Parliament recently adopted the ninth amendment to the Act Against Restraints of Competition. The agreed amendments take account of the ongoing digitalisation of the economy and also intend to close legal gaps in the liability for violations of competition law. However, one of the main aims of the proposed reform is to implement the EU Directive on Antitrust Damages Actions, increasing the efficiency of competition enforcement.

Joint venture between competitors – joint production: yes; joint commercialisation: no!
  • Germany
  • April 13 2017

Following an anonymous complaint, the Federal Cartel Office (FCO) recently investigated a joint venture between two competitors. The FCO did not have to decide finally on the case, but it preliminarily concluded that the joint venture facilitated market coordination between the two parents. The FCO applied a presumption according to which both parents would take into account information from the joint venture when deciding on their own market conduct.

Merger control filing requirements for leasing agreements
  • Germany
  • February 23 2017

The Federal Cartel Office (FCO) recently issued a decision on a merger control notification from Lufthansa and Air Berlin regarding a wet lease. The agreement is part of Air Berlin's restructuring process. The case underlines the fact that the FCO's application of the concept of 'control' differs from the European Commission's view and raises further questions relating to German merger control.

Federal Cartel Office publishes draft guidelines on resale price maintenance
  • Germany
  • February 09 2017

The Federal Cartel Office recently published draft guidelines on resale price maintenance. While the guidelines are officially targeted at the food retail sector, they are also likely to have a significant effect on other sectors. A public consultation has been initiated and interested parties are invited to submit comments by March 10 2017. The Federal Cartel Office has stated that it is likely to prosecute vertical price fixing in fines proceedings, not in mere administrative proceedings.

Resale price maintenance – Federal Cartel Office issues new fines
  • Germany
  • January 26 2017

The Federal Cartel Office recently imposed fines totalling €4.43 million on five furniture manufacturers and four managers for resale price maintenance. While the office did not impose any fines on the retailers, it made clear that this decision was a matter of discretion and taken in view of the particular facts of the case. The proceedings were initiated by dawn raids in 2014 and 2015, following complaints by retailers. This indicates that vertical infringements are a top priority for the Federal Cartel Office.


Employment & Benefits

Contributed by CMS
German corporate codetermination withstands ECJ scrutiny
  • Germany
  • August 23 2017

Since the Berlin Higher Regional Court referred the question to the European Court of Justice of whether it is compatible with EU law that only workers employed in Germany are eligible to participate in the election of workers' representatives on the supervisory board, Germany's legal sector has been eagerly awaiting an answer. The answer is now available and is likely to allow the legal sector to breathe a sigh of relief.

Consultation procedure for collective redundancies
  • Germany
  • July 05 2017

In reorganisation scenarios, German employers must comply with a number of statutory regulations. If a reorganisation involves redundancies and if certain thresholds are exceeded in this respect, special attention must be paid to the regulations aimed at preventing collective redundancies. Any notice of dismissal given in violation of the regulations to prevent collective redundancies contained in Sections 17 and 18 of the Act on Protection Against Unfair Dismissal is invalid.

Reform of temporary employment: requirements in practice
  • Germany
  • May 03 2017

Discussions concerning the reform of temporary employment planned by the coalition government characterised 2016. It was intended that the Employee Assignment Act, the Works Constitution Act and the Civil Code be readjusted in order to "align temporary work with its core function and prevent the abuse of structures with contracts for work and services". As the legislative process has since been completed, it is now clear that in 2017 the temporary employment industry will face substantial changes.

Transparency of Remuneration Act approved
  • Germany
  • March 29 2017

The Federal Cabinet recently passed the Transparency of Remuneration Act, which is supposed to come into force before Summer 2017. The highly controversial preliminary draft was revised on several occasions. The requirement that the minimum remuneration be stated when advertising a position and an additional codetermination right be included when "implementing measures in terms of actual remuneration equality between women and men" were omitted and not replaced.

Personnel data within company group – an internal matter?
  • Germany
  • February 15 2017

Data transfers between group companies are often regarded as an internal matter and this appears to be true, especially if the parent company cites plausible reasons for its inquiry. However, the transfer of personal employee data between legally independent companies in a group is not necessarily permissible. The Federal Data Protection Act permits the collection, processing and use of personal data only if it is permitted by law or if the data subjects have given their consent.


Franchising

Contributed by Noerr LLP
No compensation claim for franchisee where franchisor must block customer data when agreement terminated
  • Germany
  • October 24 2017

The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.

No significant obstruction to advertising franchise systems
  • Germany
  • April 04 2017

The Federal Court of Justice recently criticised a franchising advertising flyer in terms of competition law. One interpretation of this judgment is that it makes the advertising of franchise systems significantly more difficult. However, this point of view does not ultimately do justice to the decision, as the judgment does not fundamentally question the typical advertising of franchise systems.

Adequate substantiation of franchise and marketing fees in arrears
  • Germany
  • March 07 2017

A Brandenburg Higher Regional Court decision regarding the payment of franchise and marketing fees in arrears shows the importance of a substantiated presentation of a claim, as well as the importance of accurate, transparent and comprehensible billing by franchisors. The court could not ascertain whether there were unpaid franchise or marketing fees, as the franchisor failed to present sufficient facts demonstrating the exact amount of the franchise and marketing fees in the respective timeframes.

Federal Supreme Court decision complicates franchisor advertising on behalf of franchisees
  • Germany
  • June 14 2016

The Federal Supreme Court recently ruled that a franchisor's supplement containing prices stipulated as being "non-binding recommendations" obtainable only "in participating markets" constituted an act of unfair competition as the disclaimer was insufficient. The judgment raises questions about disclaimers, franchisor advertising obligations and whether franchisors are prohibited from enlisting franchisees to participate in a promotion.

Franchising and insolvency
  • Germany
  • March 08 2016

Sometimes a franchisee can no longer pay some or all of the price of goods purchased from the franchisor, the rent for the premises or the franchise fees. Deferrals or instalment agreements may be among the solutions. But what happens if the concessions of the franchisor or the efforts of the parties are inadequate and the franchisee falls into insolvency?