Table of contents
The prohibition of company disparagement (Section 7 UWG) primarily aims to prevent a company from damaging the reputation of its competitors through disparaging statements. It therefore concerns the relationship between companies (B2B).
A violation thereof is one of the more specific forms of unfair business practices and is therefore always examined preferentially over more general provisions.
Who
- for competitive purposes
- facts about another company
- asserted or disseminated
- which have the potential to cause harm and
- are not demonstrably true
acts unfairly.
The 5 Conditions for Prohibited Disparagement in Detail
For Competitive Purposes
…is acted upon when a competitive relationship exists between the party affected by the statement and the party making the statement, and the latter exhibits competitive intent.
A competitive relationship always exists when there is a reciprocal connection between the advantages a company gains through its actions and the disadvantages that consequently affect another company.
In short, this will always be the case when two businesses have the same customer base.
The intent to promote one’s own (or even third-party) competition at the expense of another company (competitive intent) is already considered given in the case of a disparaging statement about a competitor, and its existence is presumed.
Facts
… are circumstances and conditions that are objectively verifiable.
They must be distinguished from mere value judgments, i.e., subjective opinions, which do not fall under the definition of prohibited company disparagement.
Is the statement a – albeit highly embellished – presentation of facts, or has the speaker merely expressed their opinion?
Crucial is whether a statement contains a verifiable factual core that is amenable to proof.
When assessing a statement and distinguishing between a fact and a mere value judgment, the understanding of the target audience must be considered.
How does the statement appear to a potential customer as the average recipient of the declaration?
In this regard, an overall consideration of the circumstances must take place.
If the statement has a verifiable, true core, there is no company disparagement under Section 7 (1) UWG.
Even images or three-dimensional representations can convey corresponding factual content.
Examples of Factual Statements:
For example, if a company is referred to as a “locust,” this is verifiable, as the term is widespread in business and stands for a company that acquires, strips, and then resells other companies as quickly as possible to achieve the highest possible return.
Whether a company actually proceeds in this manner can be verified by examining facts.
It can also be determined whether a part of a machine is “the cheapest of the cheap.” This is verified by examining the quality of the component in question.
Peter HarlanderHarlander & Partner Rechtsanwälte „Ist eine Äußerung mehrdeutig, muss der Äußernde die für ihn ungünstigste Auslegung gegen sich gelten lassen!“
Rule of Ambiguity:
For example, if a newspaper is referred to as belonging to the “yellow press sector,” the speaker must accept that the term will be interpreted as a description for sensationalist tabloids and hate newspapers.
Precise wording is therefore advisable.
Asserting or Disseminating
An assertion is made on one’s own initiative and from one’s own knowledge. Dissemination, however, is the passing on of a statement made by a third party.
For the prohibition under Section 7 (1) UWG, however, it makes no difference whether a fact was asserted or disseminated. The sole decisive factor is that the statement was made to at least one person other than the potentially aggrieved party.
Potential for Harm
… exists if the dissemination or assertion is capable of damaging the business operations of the company or the credit of the owner.
It is irrelevant whether damage has already occurred or whether the speaker actually intended to harm the competitor. The only decisive factor is that the statement is objectively capable of diminishing the reputation of the other company or its owner among the relevant customer base.
Not Demonstrably True
Peter HarlanderHarlander & Partner Rechtsanwälte „Obwohl eine Äußerung wahr ist, kann sie dennoch unlauter nach der Generalklausel des § 1 UWG sein!“
A violation of the prohibition already exists if the truth of the statement cannot be proven. (“…not demonstrably true…”).
Peter HarlanderHarlander & Partner Rechtsanwälte „Wichtig: Im Falle eines Rechtsstreits muss derjenige, der die herabwürdigende Aussage getätigt hat, beweisen, dass seine Aussage wahr ist!“
Special Case: Confidential Communications
A special regulation applies if the statement was a confidential communication and the recipient had a legitimate interest in the information.
Here, exceptionally, the plaintiff must prove that the statement is untrue!
The communicator, for their part, can only be held liable if they knew or ought to have known the untruth of the fact.
What Claims Arise from Unfair Disparagement?
- Injunction
- Retraction and Publication of Judgment
- Damages
Important Points
- If a business owner makes disparaging statements about a competitor within the same customer base (competitive relationship) (presumed competitive intent), a violation of the prohibition of company disparagement may exist.
- The prohibition only applies to statements about facts.
- Facts, in contrast to mere value judgments, are objectively verifiable.
- The standard for distinguishing between facts and subjective value judgments are the average recipient and the overall consideration of the circumstances.
- Generally, the burden of proof for the truth of the statement lies with the party making the disparaging statement, unless it is a confidential communication.
- If a fact is demonstrably true, it does not fall under the prohibition, but may still be unfair under more general provisions.
- Rule of Ambiguity: If a statement is ambiguous, the speaker must accept the interpretation most unfavorable to them.
- A prerequisite for a violation of the prohibition is that the statement is objectively capable of diminishing the competitor’s reputation.