Germany updates

Aviation

Contributed by Arnecke Sibeth Dabelstein
New basic regulation will revise aviation landscape
  • Germany
  • 14 November 2018

The European Parliament and Council recently revised and replaced the basic regulation on common rules in the field of civil aviation. The new basic regulation promises a number of significant changes to the German aviation landscape over the next five years. Among other revisions, the Federal Aviation Office could lose some of its control over certain tasks relating to air operator certification, oversight and enforcement.

Digitisation gains ground: new government-funded app to support passenger right claims
  • Germany
  • 24 October 2018

The State Parliament of North Rhine-Westphalia recently decided to launch an airline passenger rights app. The new app is intended to promote consumer protection and help passengers to claim compensation easily via their mobile phones. It will be developed by the consumer advice centre and is expected to inform passengers of their rights, perform claim checks, offer suggestions on how and where to assert claims and actively support the process of claiming compensation.

Aircraft passenger rights under wet lease agreements
  • Germany
  • 10 October 2018

The Hamburg Regional Court recently referred to the European Court of Justice (ECJ) the question of which air carrier is the operating air carrier within the meaning of EU Regulation 261/2004 where the flight is operated under a wet lease agreement. The ECJ confirmed that air carriers which lease aircraft and crew to other air carriers under a wet lease agreement but bear no operational responsibility for the flights are not covered by the concept of 'operating air carrier' within the meaning of the regulation.

Airline denied compensation for costs caused by carriage of sky marshals
  • Germany
  • 03 October 2018

The Federal Court of Justice recently denied a claim for compensation regarding costs relating to the duty of German airlines to carry sky marshals, who are entrusted with the security of certain flights based on specific security considerations and by decree of the federal police. While the court's argument was legally stringent, it lacked sustainable reasoning as to why airline cost and security obligations should be more important than those of other transport means or sectors.

German drone regulation superseded by new EU aviation safety rules
  • Germany
  • 12 September 2018

A new European Council regulation provides basic rules for civil aviation security across EU member states. Such clarification is welcome news for Germany, where previously only fragmented rules and regulations on lighter unmanned aircraft and drones existed. However, as the EU regulation fails to address every issue relating to drone safety, Germany's existing drone regulation will continue to apply where no new rules are implemented or where Germany remains the competent authority.


Banking

Negative interest on existing cash deposits imposed by change in terms and conditions unlawful
  • Germany
  • 16 February 2018

The Tubingen Regional Court recently held that negative interest on a consumer's existing cash deposits imposed by a German bank by unilaterally changing the bank's general terms and conditions was unlawful. According to the court, the defendant bank violated the rules of the general terms and conditions regime because it did not differentiate between existing deposits and newly deposited cash.

EAPO regulation: initial experiences with German courts
  • Germany
  • 05 January 2018

As of January 2018, the EU regulation which established a new European Account Preservation Order (EAPO) procedure will have been effective and in force for one year. In Germany, the most important conclusion which can be drawn from the past year is that the German courts are adopting EAPOs. However, as the procedure is still fairly new to the courts, it has taken time and effort on the part of creditors.

Are arrangement and processing fee clauses in commercial loan agreements invalid?
  • Germany
  • 08 September 2017

The Federal Court of Justice recently issued two rulings declaring that processing fee clauses in standardised commercial loan agreements are invalid as they unreasonably disadvantage borrowers. Previously, the majority of lower German court rulings had upheld the validity of such clauses in commercial loan agreements. Going forward, lenders have a number of options to deal with the issues raised in these new court decisions.


Competition & Antitrust

Contributed by CMS
Selective distribution: legality of third-party platform bans confirmed
  • Germany
  • 26 July 2018

The Frankfurt Higher Regional Court recently implemented the European Court of Justice's (ECJ's) sailing instruction and decided in favour of the luxury cosmetics manufacturer Coty on third-party platform bans in selective distribution. The judgment comes after the ECJ – in an abstract manner – declared third-party platform bans in the selective distribution of luxury goods permissible under competition law.

Federal Court of Justice resolves dispute on limitation periods in cartel damages claims
  • Germany
  • 28 June 2018

Litigants may now seek cartel damages for a longer period as the Federal Court of Justice has affirmed the suspension of the statute of limitations for antitrust claims before 1 July 2005. The court's judgment creates legal certainty and increases Germany's attractiveness as a jurisdiction for plaintiffs in cartel damages cases. It is also a major setback for defendants in cases concerning cement, truck and sugar cartels (among others), which will face even bigger damages claims.

Federal Court of Justice rules on price comparison tool ban
  • Germany
  • 29 March 2018

The Federal Court of Justice recently held that absolute prohibitions to participate in online price comparison tools imposed on distributors in selective distribution systems amount to a hardcore restriction under Article 4c of the EU Block Exemption Regulation on Vertical Restraints. A closer look at the German decision reveals some doubts as to its compatibility with two European Court of Justice decisions.

Court avoids decision on per se illegality of restrictions of competition by object
  • Germany
  • 15 February 2018

A recent Celle Regional Court decision on a clear resale price maintenance case has been heavily debated because the court held that restrictions of competition by object can be compatible with Article 101(1) of the Treaty on the Functioning of the European Union if they have no potentially significant effects on competition. The Federal Supreme Court has since overruled the decision, leaving it open as to whether the potential effects on competition must be considered in such cases.

Ninth amendment of Act Against Restraints of Competition
  • Germany
  • 15 June 2017

The Federal Parliament recently adopted the ninth amendment to the Act Against Restraints of Competition. The agreed amendments take account of the ongoing digitalisation of the economy and also intend to close legal gaps in the liability for violations of competition law. However, one of the main aims of the proposed reform is to implement the EU Directive on Antitrust Damages Actions, increasing the efficiency of competition enforcement.


Employment & Benefits

Contributed by CMS
New maximum hiring out period expires for some contractors
  • Germany
  • 17 October 2018

In view of a statutory transition clause in the Temporary Employment Act, for some deployment agencies the 18-month maximum hiring out period will end shortly – for external employees deployed as of 1 April 2017, the expiry date could have been the end of September 2018. To avoid all possible risk of overstepping the maximum hiring out period, personnel services providers and companies using such providers are advised to determine precisely what they consider the expiration date to be.

Fixed-term employment contracts: three-year limit for prohibiting prior employment overturned
  • Germany
  • 25 July 2018

The Federal Constitutional Court recently restricted the option of concluding fixed-term employment contracts without an objective reason with applicants who have previously worked for the employer. The court also recognised that an unlimited prohibition on prior employment can unreasonably restrict the option of fixed-term contracts without objective reason. This ruling has consequences for current fixed-term contracts and for future hiring practice.

Grand coalition's plans for labour law
  • Germany
  • 14 March 2018

The Christian Democratic Union of Germany, the Christian Social Union in Bavaria and the Social Democratic Party of Germany recently concluded negotiations for a new grand coalition. The 177-page coalition agreement contains very specific proposals for changes to labour law, including with regard to the maximum duration of successive fixed-term employment contracts, substantial restrictions for fixed-term contracts and employees' entitlement to part-time work for a limited period.

Pay Transparency Act: information claims
  • Germany
  • 21 February 2018

The Pay Transparency Act bundles together some regulations and requirements that had already been established and is intended to close the adjusted gender pay gap. That the act's practical relevance has proved limited thus far can be explained by the fact that it was not possible to assert the information claim until January 6 2018. Nevertheless, it should be kept in mind that the legal consequences of failings to provide information have yet to be clarified.

Act to Strengthen Company Pensions brings important changes for employers
  • Germany
  • 17 January 2018

The Act to Strengthen Company Pensions has introduced pure defined contribution schemes for the first time. This means that employers will not promise specific or calculable retirement benefits, but merely undertake to pay specific contributions to an external pension provider. However, it remains to be seen whether the legislature has managed to strengthen and further spread company pension schemes as intended based on the act.


Franchising

Contributed by Noerr LLP
Admissibility of lawsuit despite effective mediation clause in franchise agreement
  • Germany
  • 02 October 2018

A recent Hamburg Regional Court decision is generally understood to have solidified the first franchise-related court judgment on bad faith regarding mediation clauses rendered by the Saarbruecken Higher Regional Court in 2015. However, at second glance, the Hamburg judgment provides a different reasoning for bad faith regarding a mediation objection and might therefore serve as a new application of bad faith in future franchise-related court proceedings regarding mediation clauses.

Requirements for interim injunction to enforce obligation to operate business
  • Germany
  • 06 February 2018

The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be remedied.

No compensation claim for franchisee where franchisor must block customer data when agreement terminated
  • Germany
  • 24 October 2017

The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.

No significant obstruction to advertising franchise systems
  • Germany
  • 04 April 2017

The Federal Court of Justice recently criticised a franchising advertising flyer in terms of competition law. One interpretation of this judgment is that it makes the advertising of franchise systems significantly more difficult. However, this point of view does not ultimately do justice to the decision, as the judgment does not fundamentally question the typical advertising of franchise systems.

Adequate substantiation of franchise and marketing fees in arrears
  • Germany
  • 07 March 2017

A Brandenburg Higher Regional Court decision regarding the payment of franchise and marketing fees in arrears shows the importance of a substantiated presentation of a claim, as well as the importance of accurate, transparent and comprehensible billing by franchisors. The court could not ascertain whether there were unpaid franchise or marketing fees, as the franchisor failed to present sufficient facts demonstrating the exact amount of the franchise and marketing fees in the respective timeframes.