Federal Court rules on the labelling obligation of influencers

On 9 September 2021, the German Federal Court of Justice ruled for the first time on the conditions under which influencers must label their social media posts as advertising. In three landmark decisions, the Federal Court determined that a labelling obligation only exists if an influencer receives a remuneration for the product presentation or if the posts are “overly promotional” as products are presented without any critical distance or as links are provided to external websites of the manufacturers. However, the mere linking to social media profiles of the manufacturers alone does not lead to a labelling obligation.

The subject of the decisions were so-called “tap tags” in Instagram posts by influencers Cathy Hummels, Leonie Hanne and Luisa-Maxime Huss. „Tap tags” are used to mark products in social media posts by influencers. When images are clicked, a short caption appears, usually mentioning the name of the product or manufacturer. A clickable link takes the user either to the social media profiles of the providers or manufacturers of the products or to external websites where the products can sometimes even be purchased directly.

Luisa-Maxime Huss received a remuneration from the product manufacturer for her “tap tag”, while the other two influencers did not.

According to the Federal Court, a product post on Instagram is always a commercial act in favour of another company and has to be labelled as advertising if the influencer receives a remuneration in return for his post. The Federal Court therefore classified the product post by Luisa-Maxime Huss as advertising subject to labelling.

Furthermore, according to the Federal Court, a labelling obligation only exists if the post is overly promotional according to its overall impression, for example because it solely praises the advantages of a product of this company without any critical distance in such a way that the presentation leaves the framework of an “objective information”. The mere fact that posts were “tap-tagged” to the Instagram profile of the product manufacturer was not sufficient for the assumption of product advertising. Therefore, the Federal Court declared the two posts by Cathy Hummels and Leonie Hanne admissible. However, the Federal Court apparently takes a different view in the case of a link to an external website of the manufacturer of the product depicted. In this case, the post must be marked as advertising.

The decisions of the Federal Court of 9 September 2021 (– I ZR 90/20, I ZR 125/20, I ZR 126/20) have not yet been published. The press release of the Federal Court of 9 September 2021 can be found here.

With the Act to Strengthen Consumer Protection in Competition and Trade Law coming into force on 28 May 2022, the mere placing of a “tap tag” on the product manufacturer’s website will no longer lead to a labelling obligation. According to the new regulations also known as the “influencer law”, a product post is only subject to labelling if the influencer receives a remuneration or a similar consideration from the product manufacturer or allows himself to be promised such. The law contains a presumption that the influencer has received or been promised such consideration. However, an influencer can disprove this presumption.

The Act to Strengthen Consumer Protection in Competition and Trade Law can be found here.

The question of how influencers must label their posts on social media profiles as advertising in case of a labelling obligation, has not yet been clarified by the highest courts. The new “influencer law” does not provide any requirements in this regard. According to the opinion of some instance courts, labelling with hashtags such as “#ad”, “#sponsored by”, “#poweredby” at the end of the post should not be sufficient (cf. Higher Regional Court Celle, judgment of 8 June 2017 – 13 U 53/17 here; Higher Regional Court Berlin, decision of 11 October 2017 – 5 W 221/17 here). According to the guidelines of the State Media Authorities (here), promotional image and text posts must also be clearly legibly marked with “Werbung” or “Anzeige” at the beginning of the post. However, the guideline as a mere recommendation is not legally binding.

(9 September 2021)