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Created on Friday, 07 November 2008 00:32

Last Updated on Friday, 28 December 2012 18:41

Permissibility to Give Notice to Commercial User of Internet Auction House

KG (August 08,2005, re 13 U 4/05) laid down the rules for terminating membership in internet marketplaces like eBay.

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This article will give you in a nutshell, 1.) when a commercial membership in an electronic marketplace may be cancelled by the provider – especially when an extra-ordinary termination is justified, and 2.) rules for deleting negative critics on transactions.

The plaintiff is a tradeswoman and runs a jewelry shop since 1997. Her husband previously had a professional account with the nickname “H…” and sold items from his wife’s shop. The account “H…” received some 19 negative critics during the period of March to Mai 2003, whereof 10 negative critics hailed in during the last two weeks. Thereupon, the provider terminated its contract with the husband. Soon afterwards the plaintiff installed a new account under the nickname “W…” to do the same business as her husband. Soon afterwards, the provider also closed this account per extraordinary notification. The provider reasoned termination was necessary referring to the bad critics in the past relating to her husband and that she did not disclose that she was continuing her husband’s business, which was closed because he did not comply with membership rules.

Kammergericht ruled that an extraordinary notification on the membership of an internet marketplace is like all other service contracts subject to termination. In this case, an extraordinary termination was justified because plaintiff did not disclose that she had virtually taken over an unwanted business on that marketplace. She deceived on an essential detail, which generally justifies extraordinary termination of any contract. In other words, she stooged her husband’s forbidden business.

The plaintiff’s arguments were not at all followed by the court. She argued that it was beyond dispute that she did not receive any negative critics. Just because she was the wife of a blocked member cannot mean that she automatically was to be blocked. Her husband’s bad critics were all illegal because they were only revenge for unfulfilled expectations.

The court disqualified these arguments because this market provider, and also on behalf of the other participants of the marketplace, has a legitimate and prevailing interest to keep its marketplace serious and reliable. Manipulations on the market threaten its functionality and credibility. Such blocking is conform, it is not an expectable clause and is not unreasonable. Unexpected and especially unreasonable contractual clauses are void following §307 BGB. It is not the provider’s duty to control that any critics are justified. With millions of transactions daily, it is unreasonable to demand that the provider verifies each and every negative remark on a vendor. The provider has a market dominating position and is therefore not allowed to terminate a membership.

The court agreed with the defendant that even if the provider has a dominating position on the market, the vendor has no enforceable right to membership following §§19 IV no. 4, 20 II, 33 GWB. A market dominating position is considered when a company has around 30% or more of the market. Such has not been proven. An enforceable right of membership would exist if there would be in fact no other possibility to make that business as with that certain provider. In spite of this company’s prominent position, jewelry can be and is sold on many different internet shops.

§§33, 20 Abs. 2 GWB however, does not require a market domination and rule the case that small to mid-size businesses are dependent upon on this provider for certain kinds or goods or services. Jewelry sold on the Internet is just as much the same as sold in a real shop.

Therefore, stick to the rules if you have no absolutely genuine business that nobody else offers.




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