The Munich Regional Court recently addressed the promotion of error fares by an online portal for cheap flights, hotels and travel packages in Germany. The promotions, which had encouraged customers to book error fares for flights published accidentally by airlines, were deemed unlawful due to a deliberate obstruction of competition in contravention of the Act Against Unfair Competition. The court's decision is appropriate considering the high number of consumers reached by online portals.
The Federal Court of Justice recently clarified the liability of airlines with respect to passenger rights and information obligations when a flight is operated under a wet lease. EU Regulation 261/2004 defines an 'operating air carrier' as an air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person having a contract with that passenger. The Federal Court of Justice held that in case of a wet lease, the lessee must be regarded as the operating air carrier.
The Federal Supreme Court recently issued a decision regarding the right to a refund of the ticket price following the cancellation of non-refundable tariffs. The decision highlights that a passenger can waive his or her right to cancel a ticket so long as that passenger makes an informed decision. This secures an air carrier's flexibility in offering a wide range of different ticket prices and ensures lively competition.
In Germany, a carrier is, in general, value added tax (VAT) liable along the domestic part of the flight route. However, it is possible for the carrier to apply for VAT remission according to the VAT Act. If the carrier is a German entity, the remission applies without further requirements other than an invoice without VAT. In contrast, if the carrier is a foreign entity, the tax relief must be mutual (ie, the state of the registered office of the foreign carrier must grant tax relief to German carriers as well).
The State of Hesse has decided to implement the use of drones. For this purpose, the police acquired four drones to help with their work in the region starting in February 2018. In order to operate the drones, each of the eight future drone pilots must complete a two-week workshop containing theoretical and practical modules. The drones will be used at accident sites and crime scenes in particular.
The Tubingen Regional Court recently held that negative interest on a consumer's existing cash deposits imposed by a German bank by unilaterally changing the bank's general terms and conditions was unlawful. According to the court, the defendant bank violated the rules of the general terms and conditions regime because it did not differentiate between existing deposits and newly deposited cash.
As of January 2018, the EU regulation which established a new European Account Preservation Order (EAPO) procedure will have been effective and in force for one year. In Germany, the most important conclusion which can be drawn from the past year is that the German courts are adopting EAPOs. However, as the procedure is still fairly new to the courts, it has taken time and effort on the part of creditors.
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.
The Federal Court of Justice recently held that absolute prohibitions to participate in online price comparison tools imposed on distributors in selective distribution systems amount to a hardcore restriction under Article 4c of the EU Block Exemption Regulation on Vertical Restraints. A closer look at the German decision reveals some doubts as to its compatibility with two European Court of Justice decisions.
A recent Celle Regional Court decision on a clear resale price maintenance case has been heavily debated because the court held that restrictions of competition by object can be compatible with Article 101(1) of the Treaty on the Functioning of the European Union if they have no potentially significant effects on competition. The Federal Supreme Court has since overruled the decision, leaving it open as to whether the potential effects on competition must be considered in such cases.
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.
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.
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.
The Christian Democratic Union of Germany, the Christian Social Union in Bavaria and the Social Democratic Party of Germany recently concluded negotiations for a new grand coalition. The 177-page coalition agreement contains very specific proposals for changes to labour law, including with regard to the maximum duration of successive fixed-term employment contracts, substantial restrictions for fixed-term contracts and employees' entitlement to part-time work for a limited period.
The Pay Transparency Act bundles together some regulations and requirements that had already been established and is intended to close the adjusted gender pay gap. That the act's practical relevance has proved limited thus far can be explained by the fact that it was not possible to assert the information claim until January 6 2018. Nevertheless, it should be kept in mind that the legal consequences of failings to provide information have yet to be clarified.
The Act to Strengthen Company Pensions has introduced pure defined contribution schemes for the first time. This means that employers will not promise specific or calculable retirement benefits, but merely undertake to pay specific contributions to an external pension provider. However, it remains to be seen whether the legislature has managed to strengthen and further spread company pension schemes as intended based on the act.
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.
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.
The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be remedied.
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.
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.
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.
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.