New Information Obligations for Online and Offline Traders

New information obligations for traders are applicable with immediate effect: They must inform consumers of the option to have complaints and disputes settled before consumer arbitration boards. If they do not comply with this obligation, they may receive warning letters from consumer protection associations and competitors and in this case are liable for the costs. This concerns almost all traders with an internet presence as well as traders who use terms and conditions (also offline). Therefore, the new information obligations do not only apply to online traders, but also to many retailers and even to liberal professions.

New regulations in the German consumer dispute resolution law (Verbraucherstreitbeilegungsgesetz)

The corresponding regulations of the German consumer dispute resolution law came into force on 1 February 2017.  They implement the “European Directive on Alternative Dispute Resolution for Consumer Disputes”. Furthermore, the law and the directive also govern the quality requirements to be fulfilled by the consumer arbitration boards and the procedure for their official recognition.

Specific need for action for many traders

  • The information obligations apply to traders if they maintain a website or use terms and conditions,
  • aim their offer (also) at consumers and
  • employ more than ten people (including freelance workers) (cut-off date: 31 December of the previous year).

Traders who fulfil these conditions must provide “clear and comprehensible” information on their website or in their terms and conditions whether they are obliged to participate in a dispute resolution procedure before a consumer arbitration board (this pertains to only a few exceptional cases, e.g., in accordance with the German energy industry law (Energiewirtschaftsgesetz) or in accordance with association charters) or whether they want to voluntarily participate in the procedure. If there is no obligation to participate in the procedure and if the trader is not prepared to voluntarily participate in it, then it must provide information to that effect.

The information obligations do not apply in regard to the provision of non-economic services of public interest, health services and public further and higher education.

Further information obligations in the case of conflict

If there is a conflict between the trader and consumer after the conclusion of the contract and it cannot be settled (e.g., by the efforts of the complaint management team), then the trader must inform the consumer which of the 21 currently recognised consumer arbitration boards is competent for the out-of-court dispute resolution. It must also do so even if it is not obligated to participate in such a procedure and has declared that it is not prepared to do so.
On the whole, a trader is therefore not forced to participate in a dispute resolution procedure by the new provisions. Despite declarations to the contrary, in individual cases it may embark on a dispute resolution procedure – and despite such a declaration, in some circumstances it must repeat several times that it is not prepared to participate in a dispute resolution procedure, if necessary, even when a consumer unilaterally attempts to launch an arbitration procedure.

Connection to the Regulation on Consumer ODR

The new information obligations complete – with a clearly broader scope of application – the system of out-of-court settlement of disputes between consumers and traders initiated by the ODR Regulation. According to the ODR Regulation, which has been in force since January 2016, on their website online traders are obligated to indicate the internet presence of the EU ODR platform (cf. in this regard Update by Raue LLP “Neue Pflichten im E-Commerce”). In turn, the EU platform lists the consumer arbitration boards that are recognised by the member states.

(3 March 2017)