Report on the IMKR Lecture “Ad Blockers on Websites – In Line with Competition Law or Anticompetitive?” by Prof. Alexander
On December 13, 2017, Prof. Dr. Christian Alexander, holder of the Chair of Civil Law, Business Law, and Media Law at Friedrich Schiller University Jena, spoke in the lecture series of the Institute for Media and Communications Law (IMKR) on the topic “Ad Blockers on Websites – In Line with Competition Law or Anticompetitive?” In his presentation, he focused primarily on analyzing the decisions of the Munich Higher Regional Court (Higher Regional Court of Munich, judgment of August 17, 2017 – U 2225/15) and the Higher Regional Court of Cologne (Higher Regional Court of Cologne, judgment of June 24, 2016 – 6 U 149/15).
After Prof. Rösler’s opening remarks, Prof. Alexander first presented the various issues surrounding the ad blockers’ business model. He noted that the business practice of combined “blacklisting and whitelisting” poses particular problems. For example, some ad-blocker operators offer the option of placing selected advertisers on a “whitelist” for a fee, so that their advertisements continue to be displayed to Internet users.
Prof. Alexander provided a detailed description of the conditions for the application of the Act against Unfair Competition (UWG). First, there must be a commercial act as defined in § 2(1) No. 1 UWG and competitors within the meaning of § 2(1) No. 3 UWG. A commercial act within the meaning of the UWG does not necessarily mean that the act must be performed for compensation. Even an act performed without compensation can be anticompetitive.
Every competitor within the meaning of § 2(1) No. 3 UWG is entitled to a claim for injunctive relief and removal under § 8(3) No. 1 UWG. For this to apply, the affected (media) company must be a competitor of the software manufacturer. In principle, neither offers substitutable products. However, a competitive relationship would also exist in the case of an interdependent relationship. Thus, the company’s own competition is promoted while that of others is impaired. A comparable case had already been before the Federal Court of Justice (BGH) in 2004 in the so-called “Fernsehfee” decision (BGH, judgment of June 24, 2004 – I ZR 26/02). At that time, a device was being marketed that automatically detected advertisements in TV programming and switched channels accordingly. Several lessons regarding ad-blocker business practices can be drawn from this ruling.
Another issue is the requirement under § 4 No. 4 UWG regarding targeted obstruction in horizontal relationships. After all, (media) companies are not prevented from advertising their own products. Instead, only advertising on third-party platforms is prevented. This does not constitute a direct impact on the websites or their servers.
Furthermore, aggressive influence in a vertical relationship under § 4a(1) UWG may be present. The Munich Higher Regional Court affirmed the existence of a vertical relationship, particularly in the case of a whitelist agreement. With regard to the elements of § 4a(1) UWG, only impermissible influence (§ 4a(1) sentence 2 No. 3 UWG) could be considered. This would require a significant restriction of competitiveness through the exploitation of the company’s position of power by exerting pressure. The Higher Regional Court of Cologne had affirmed that “Adblock Plus” held a position of power due to a situation of blockade it had created. In contrast, the Higher Regional Court of Munich left open the question of whether “Adblock Plus” held a position of power and, moreover, rejected the notion that it had exploited (a possible) position of power.
Ultimately, according to Prof. Alexander, the only remaining provision under the UWG is the general clause on general market obstruction pursuant to § 3(1) UWG. In the parallel case from 2004 (the “Fernsehfee” decision), the facts were insufficient to establish a violation of competition law from the perspective of a general market obstruction. According to Prof. Alexander, the legal situation regarding ad blockers can be viewed in the same way. Consequently, unfair conduct within the meaning of the UWG must be ruled out. Even when taking Article 5(1) of the Basic Law (GG) into account, one would generally not reach a different conclusion.
The aforementioned decisions did not take §§ 5 and 5a(2) UWG into account with regard to misleading consumers. However, it is questionable whether consumers are even aware that the whitelisting method does not block all advertising. The ensuing discussion focused in particular on the ability of media companies to deny access to users who use ad blockers. Furthermore, the discussion considered how advertising companies can be added to the whitelist and whether there might be potential for blackmail or pressure from ad-block operators in this context.
