What the new Anti-Warnings Act entails
In recent years, some associations and lawyers have repeatedly sent out masses of warning letters.
Those who had made a business concept out of this instrument are now to be put in their place by a new law.
To this end, the Bundestag approved the so-called "Act to Strengthen Fair Competition" on 10 September 2020, often simplified as the "Anti-Warnings Act".
Operators of online services in particular should breathe a sigh of relief in view of the changes.
But what exactly is supposed to change as a result?
- Higher hurdles due to the Anti-Warnings Act
- More transparency
- No contractual penalties
- Ignore warning letters?
- The Anti-Discrimination Act in Court
Higher hurdles due the Anti-Warnings Act
For the time being, nothing has changed with regard to the conditions that legitimise the issuing of warnings by competitors. The violations of competition law against which warnings can be issued have not been reduced or restricted by the new law.
Only the framework conditions will differ in future, in some cases significantly, and are intended to curb abuse in this way. In particular, it is no longer so easy to claim high costs.
Both the amount of refunds and the contractual penalties have been lowered. In addition, wrongly warned parties now have the possibility to defend themselves by filing a corresponding counterclaim.
This also applies if the warning does not comply with the required form. The amount can thereby correspond at most to that of the asserted claim. Please also note that you must initially bear your own lawyer's fees.
Only when it becomes clear that the warning was not legal or was formally incorrect is there a claim for reimbursement.
In addition, the circle of those who are allowed to issue a warning at all has been adjusted in the Anti-Warning Act. It must be an actual competitor.
Companies that only have a marginally comparable range of services and products are thus excluded.
If it is a trade association, it must be included in the list of qualified trade associations.
Only those with 75 members or more that have been active for at least 1 year are eligible for this. Only if the association manages its assets properly and is financially capable of fulfilling its tasks on its own can it be included in the list.
Anyone who wants to issue a warning in the future can no longer hide. With regard to the form, the Anti-Warrant Act requires that the name of the person or the company and its representative must be clearly stated in the letter.
Furthermore, the infringement including the circumstances, the preconditions for entitlement and the amount of the claim must be stated.
No contractual penalties
Most infringements that lead to a warning are minor. In order to better protect smaller companies with fewer than 100 employees, the Anti-Decution Act brings with it an important innovation especially for them.
If, for example, such a competitor does not correctly comply with its labelling or information obligation, it does not immediately have to fear a contractual penalty.
The same applies to negligence with regard to data protection. However, if a warning letter arrives in the mail, the mistakes should be corrected immediately, as only the first warning letter is free of charge.
Ignore warning letters?
With the passing of the Anti-Warrant Act, a first warning in cases such as the one mentioned above may therefore no longer incur costs.
However, this does not change the alleged infringement. You should therefore contact your IP lawyer as soon as possible.
He can advise you on how best to react to the accusations and, above all, whether the warning is legally effective at all.
If, on the other hand, you simply ignore it, you will soon have bigger problems and the second warning will be liable to costs in any case.
The Anti-Discrimination Act in Court
It is important to note that the Anti-Warning Act only regulates the practice of issuing warnings. If a case ends up in court, the defendant will have to pay the usual court costs.
The amount in dispute will also hardly decrease and cause further financial problems.
At least, in the case of minor infringements there is now a cap of 1,000 euros. How significant a competition infringement is, however, is decided by the court and can thus be interpreted differently.
If an expert is consulted at an early stage, it is often possible to avoid going to court. This not only saves the high costs, but also prevents a sometimes long, gruelling procedure with an uncertain outcome.
Some of the improvements made by the Anti-Warrant Act are certainly a step in the right direction. This is supported by the restrictions on the persons entitled to issue warning notices and the significantly higher demands on the form of the content.
A broader prohibition of abuse for cease-and-desist letters, the abolition of the flying jurisdiction and the amendment of the reimbursement claims are aimed at preventing large-scale abusive cease-and-desist letters in the future.
It remains to be seen whether the Anti-Warning-Off Act will actually be able to achieve that much.
For example, it can be assumed that the IDO interest association, which has already come to light in a negative way, and others will be added to the list of qualified trade associations and will continue to do their mischief under the new conditions.
Anyone who receives a warning letter should in any case seek legal advice from a lawyer. In this way, it may be possible to ward it off. In some cases, there is even a claim for reimbursement of costs under the new Anti-Warrant Act.
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Picture credits: jhstudio | PantherMedia