Amazon not liable for illegal actions of affiliates according to German Supreme Court

Trademarks

Written by Bregje van Lieshout

The website www.schlafbook.de sells mattresses and posts articles about sleeping. One of these articles concerned a ranking of 'the best mattresses of 2019'. Alongside the ranked mattresses, links were placed with a 'buy from Amazon' button which directed customers to the seller on amazon.com. The plaintiff in this case, a mattress manufacturer, objected to this, because the ranking did not mention that the article had been posted with a commercial purpose [1].

Affiliate marketing

Amazon's affiliate marketing programme allows third parties to post links on their own website which refer to products that are sold on amazon.com. When a visitor to the website buys the products via the Amazon link, the affiliate earns a commission.

The affiliate decides whether and how the link is posted. Amazon is not involved in this and only states that the affiliate must ensure that creation, maintenance, and exploitation of the website do not conflict with applicable law.

The case

There are three mattresses ranked in the ranking of www.schlafbook.de. Two of these were sold by retailers, the third mattress was sold and shipped by Amazon. The plaintiff in the case objected to the fact that in the article with the ranking, it was not clearly stated that this article had been posted with a commercial purpose, i.e., to receive commissions when visitors of the website bought the mattress from Amazon. According to the plaintiff, such unlawful product placements are against German law concerning unfair commercial practices.[1]

In this case, the plaintiff has subpoenaed Amazon instead of the website owner www.schlafbook.de. The parties involved did not agree about whether Amazon is liable for activities conducted by a third party via the 'affiliation marketing'.

Judgement

Previously, the lower court and the court of justice judged that Amazon is not liable. The German Supreme Court agrees and states that the relevant provision, section 8(2) of the German law on Unfair Competition, aims to prevent entrepreneurs from being able to avoid their liability by outsourcing an activity to employees or 'agents'. In this case, the plaintiff felt that the owner of the website www.schlafbook.de could be described as an ‘agent’ of Amazon.

Two factors determine whether the website owner is liable. On the one hand, whether the employee or agent is integrated in the company in such a way that the company profits from the success of the commercial activities of that employee or agent. On the other hand, the entrepreneur must exercise a decisive and enforceable influence over the behaviour of the employee or agent.

In this case, the website www.schlafbook.de cannot be regarded as an extension of the business operations of Amazon, and it cannot be established that Amazon outsourced its business activities to the website owner. The website owner created their own product and made and used the ranking themselves. By posting the links, the website owner could indeed earn commissions. However, the links were part of the product of the website owner and not of Amazon. This means that only the website owner can be held responsible.

Over the years, there have been a lot of cases in which the boundaries of the responsibility of the intermediary were tested

Responsibility intermediary

This is not the first time that Amazon or other companies acting as online 'intermediary' have been held accountable for the behaviour of third parties that use their platform or services. This goes back to the Google France judgement[2] from 2010, in which Google was held liable by Louis Vuitton. In that case, third parties used Google's AdWords service (an advertising programme) to offer counterfeit Louis Vuitton products. The Court of Justice determined that Google could not be held liable.

Over the years, there have been a lot of cases in which the boundaries of the responsibility of the intermediary were tested, such as in the cases L’Oréal/eBay and Coty Germany/Amazon.[3] A more recent example is another case against Amazon, namely Louboutin/Amazon, because Amazon regularly published offers for the signature red-soled shoes, but without permission from trademark holder Christian Louboutin.[4] Here, the question was asked about the extent to which Amazon could be held liable for offering the heels on its platform. In this judgement too, it was stated that Amazon's responsibility and liability depend on the influence it has on what is published by a third party on their website.

Neutral position

The judgement in the mattress ranking case seems to reflect previous judgements about the liability of online intermediaries. Once again, it appears that the 'intermediary' or the service provider in this case, can prevent liability by adopting a neutral position and by minimising intervention in the way their services are being used.
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[1] German Supreme Court 26 January 2023, case I ZR 27/22.
[2] Section 8(2) of the German law on Unfair Competition (Gesetz gegen den unlauteren Wettbewerb – UWG), the implementation of Directive 2005/29/EC. [3] CoJ EU 23 March 2010, ECLI:EU:C:2010:59 (Google France).
[4] CoJ EU 12 July 2011, ECLI:EU:C:2011:474 (L’Oréal/eBay) and CoJ 16 July 2015, ECLI:EU:C:2015:485 (Coty Germany/Amazon).
[5] CoJ EU 22 December 2022, ECLI:EU:C:2022:1016 (Christian Louboutin/Amazon).

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