CASE OF MARKT INTERN VERLAG GMBH AND KLAUS BEERMANN v. GERMANY
No violation of Art. 10
C. Russo;J.A. Carrillo Salcedo;N. Valticos
8. The first applicant, markt intern, is a publishing firm, whose registered office is at Düsseldorf. The second applicant, Mr Klaus Beermann, is its editor-in-chief. 9. Markt intern, which was founded and is run by journalists, seeks to defend the interests of small and medium-sized retail businesses against the competition of large-scale distribution companies, such as supermarkets and mail-order firms. It provides the less powerful members of the retail trade with financial assistance in test cases, lobbies public authorities, political parties and trade associations on their behalf and has, on occasion, made proposals for legislation to the legislature. However, its principal activity in their support is the publication of a number of bulletins aimed at specialised commercial sectors such as that of chemists and beauty product retailers ("markt intern - Drogerie- und Parfümeriefachhandel"). These are weekly news-sheets which provide information on developments in the market and in particular on the commercial practices of large-scale firms and their suppliers. They are printed by offset and are sold by open subscription. They do not contain any advertising or any articles commissioned by the groups whose cause they espouse. Markt intern claims to be independent. Its income is derived exclusively from subscriptions. It also publishes other series of bulletins containing more general consumer information, such as "Steuertip", "Versicherungstip" and "Flugtip", which are aimed respectively at taxpayers, holders of insurance policies and air travellers. 10. On several occasions undertakings which had suffered from the applicants’ criticism or their calls for boycotts instituted proceedings against them for infringement of the Unfair Competition Act of 7 June 1909 (Gesetz gegen den unlauteren Wettbewerb - "the 1909 Act"). 11. On 20 November 1975 an article by Mr Klaus Beermann appeared in the information bulletin for chemists and beauty product retailers. It described an incident involving an English mail-order firm, Cosmetic Club International ("the Club"), in the following terms: "‘I ordered the April beauty set ... from Cosmetic Club International and paid for it, but returned it a few days later because I was not satisfied. Although the order-form clearly and expressly stated that I was entitled to return the set if I was dissatisfied, and that I would be reimbursed, I have not yet seen a pfennig. There was also no reaction to my reminder of 18 June, in which I gave them until 26 June to reply.’ This is the angry report of Maria Lüchau, a chemist at Celle, concerning the commercial practices of this English Cosmetic Club. On 4 November we telexed the manager of the Club, Doreen Miller, as follows: ‘Is this an isolated incident, or is this part of your official policy?’ In its swift answer of the following day, the Club claimed to have no knowledge of the set returned by Mrs Lüchau or of her reminder of June. It promised however to carry out a prompt investigation of the case and to clarify the matter by contacting the chemist in Celle. Notwithstanding this provisional answer from Ettlingen, we would like to put the following question to all our colleagues in the chemists and beauty product trade: Have you had similar experiences to that of Mrs Lüchau with the Cosmetic Club? Do you know of similar cases? The question of whether or not this incident is an isolated case or one of many is crucial for assessing the Club’s policy." "‘Habe beim Cosmetic-Club International das Schönheits-Set ... von April bestellt und bezahlt, aber wegen Nichtgefallen nach wenigen Tagen zurückgesandt. Obwohl auf dem Bestellcoupon klar und deutlich geschrieben steht, dass ich bei Nichtgefallen berechtigt bin, das Set zurückzusenden und mir Erstattung zugesichert wird, habe ich bis heute keinen Pfennig wiedergesehen. Auch auf meine Abmahnung vom 18. Juni mit Fristsetzung 26. Juni erfolgte keine Reaktion.’ So der empörte Bericht der Celler Drogistin Maria Lüchau über die Geschäftstätigkeit des aus England importierten Cosmetic-Clubs. Unser Telex vom 4. November an CCI-Geschäftsführerin Doreen Miller: ‘Handelt es sich hier um eine Einzelpanne, oder gehört dieses Verhalten zu Ihrer offiziellen Politik?’ In seiner prompten Antwort tags drauf will der CCI weder etwas von Frau Lüchaus Set-Retoure noch von ihrer Abmahnung im Juni wissen. Er verspricht aber eine sofortige Untersuchung des Falles sowie eine klärende Kontaktaufnahme mit der Drogistin in Celle. Unabhängig von dieser vorläufigen Antwort aus Ettlingen unsere Frage an alle Drogerie/Parfümerie-Kollegen: Haben Sie ähnliche Erfahrungen wie Frau Lüchau mit dem Cosmetic-Club gesammelt? Oder sind Ihnen ähnliche Fälle bekannt? Die Ein- oder Mehrmaligkeit solcher Fälle ist für die Beurteilung der CCI-Politik äusserst wichtig." 12. Previously, on 20 September and 18 October 1974 and on 29 October 1975, markt intern had already published articles on the Club and advised retailers and manufacturers to be cautious in their dealings with it because the Club had failed to respect certain dates and promises. On 29 October 1975 markt intern described as correct the Club’s statement in a legal pleading that "a change in the attitude of the industry show[ed] that the call for a boycott [had] not failed to make an impression". 13. The Club instituted proceedings in the Hamburg Regional Court (Landgericht) which, on 12 December 1975, pursuant to Articles 936 and 944 of the Code of Civil Procedure, issued an interim injunction prohibiting markt intern from repeating the statements published on 20 November. 14. Since the applicants had requested a decision as to the main issue (Articles 936 and 926 of the Code of Civil Procedure), the Club instituted the appropriate proceedings within the time-limit laid down by the court. It asked the court "to restrain markt intern from publishing in its information bulletins: 1. the statement that Mrs Lüchau had given an angry account of the Club’s commercial activities to the effect that she had returned the beauty set - because she was dissatisfied with it - but had not been reimbursed despite sending a reminder, without stating at the same time that the Club had immediately sent to Mrs Lüchau an enquiry, which it had prepared, for submission to the postal authorities, and that it had assured her that it would reimburse her expenses; 2. the statement that in its immediate response to markt intern, sent on the following day, the Club had stated that it had no knowledge of the beauty set’s being returned or of the reminder sent in June, without making clear at the same time that there was no intention to raise doubts as to the accuracy of the Club’s statement; 3. the question asking colleagues of the chemists and beauty product retailers trade whether they had had similar experiences to that of Mrs Lüchau or knew of similar cases - because it was of the greatest importance in assessing the Club’s policy to know whether this case was an isolated incident or whether there had been others, without making clear at the same time that it was not sought to insinuate that the Club’s official policy was to accept payment without immediately supplying the products due". 15. The Regional Court gave its decision on 2 July 1976. It dismissed the Club’s first head of claim because the statement was accurate and there was no reason to think that markt intern would disseminate it again without indicating what had occurred since the publication of its information sheet of 20 November 1975 (enquiries made to the postal authorities, etc.). On the other hand, it allowed the other two heads of claim, basing its decision on Article 824 of the Civil Code, according to which, "anyone who untruthfully alleges or disseminates a fact liable to affect adversely a person’s creditworthiness or to cause him other disadvantages relating to his earning capacity or his career advancement, shall be liable to pay compensation for any such damage he may have caused". It found that Article 823 of the Civil Code was not applicable and left open the question whether the Club could also rely on the 1909 Act. In the Regional Court’s view, in writing that the Club claimed to have no knowledge of the return of the beauty set and of Mrs Lüchau’s reminder (the Club’s second head of claim), markt intern had not only expressed doubts as to the accuracy of this information but had also virtually asserted, without providing any proof, that the information provided was untruthful. By inviting chemists to inform it of any "similar experiences" with the Club (the Club’s third head of claim), markt intern had solicited information, which, if possible, was to be of a negative character regarding the Club, despite the fact that there were not at that stage sufficient grounds to suggest that the Club’s commercial policy was reprehensible. The Regional Court acknowledged that economic activities were subject to critical review by the press. However, it considered that the principles of the protection of legitimate interests (Article 193 of the Criminal Code) and of the freedom of expression (Article 5 of the Basic Law) did not protect the repetition of untruthful statements. The court concluded that the applicants’ conduct was culpable. Markt intern ought not to have generalised from the case of Mrs Lüchau, the circumstances of which had not yet been clarified, and used it to formulate criticism of the Club. This method of proceeding could not be reconciled with the obligations incumbent on journalists. The defendants ought to have begun by taking their enquiries further, but not in the form of their request for information from the retailers. Under the terms of the judgment, for each contravention the applicants were liable to a fine (Ordnungsgeld) or detention (Ordnungshaft) to be fixed by the court, but not exceeding DM 500,000 or six months, respectively. 16. On 31 March 1977 the Hanseatic Court of Appeal found for the applicants and quashed the Regional Court’s judgment. In the Court of Appeal’s view, the 1909 Act was not applicable because, by publishing its article on 20 November 1975, markt intern had not acted from competitive motives, in other words with a view to increasing the turnover of chemists and beauty shops, to the detriment of the Club; it had sought to inform its readers that the Club had not dealt as it should have done with a matter concerning one of its own customers. Nor could the Club rely on Articles 824 and 823 of the Civil Code because the allegations published on 20 November 1975 were not untruthful. As regards the return of the beauty set and Mrs Lüchau’s reminder (the Club’s first head of claim), the applicants’ statements had been consistent with their obligations as journalists. The Criminal Code (Article 193) in principle allowed unfavourable assessments regarding business services in so far as they sought to protect legitimate interests. Article 5 of the Basic Law recognised that the role of the press was to contribute to the forming of public opinion. Finally, there was no risk that markt intern would repeat this particular statement. The statement that the Club had claimed to have no knowledge of the beauty set and Mrs Lüchau’s reminder ("will ... weder ... noch ... wissen The form of words merely indicated to the readers that markt intern could not confirm the information provided by the Club. By its request for information from chemists (the Club’s third head of claim), markt intern had not cited facts or made allegations suggesting that the incident in question represented the Club’s official policy. It had simply recommended that its readers verify the Club’s commercial practices and, indeed, had left open the question whether Mrs Lüchau’s case was an isolated incident. It had of course expressed the opinion that it was, in its view, possible that there had been a number of other cases of the same type. This was, however, merely a value judgment. 17. The Club appealed to the Federal Court of Justice which, on 16 January 1980, set aside the Hanseatic Court of Appeal’s judgment and, varying the Hamburg Regional Court’s judgment, ordered the applicants to refrain from publishing in their information bulletin the statements disseminated by markt intern on 20 November 1975 in the form referred to by the Club in its heads of claim at first instance (see paragraph 14 above). For each contravention, the applicants were liable to a fine or detention to be fixed by the court, but not exceeding DM 500,000 or six months, respectively. 18. The Federal Court of Justice based its judgment on section 1 of the 1909 Act, according to which: "Any person who in the course of business commits, for purposes of competition, acts contrary to honest practices may be enjoined from further engaging in those acts and held liable in damages." "Wer im geschäftlichen Verkehre zu Zwecken des Wettbewerbes Handlungen vornimmt, die gegen die guten Sitten verstossen, kann auf Unterlassung und Schadensersatz in Anspruch genommen werden." (a) Notwithstanding the lack of a competitive relationship between markt intern and the Club, the 1909 Act was said to apply because it was sufficient in this respect that the contested conduct was objectively advantageous to an undertaking, to the detriment of a competitor. That was exactly the aim pursued in this instance. On these points, the Federal Court referred to the established case-law, and in particular its own, concerning the 1909 Act. In so far as the Court of Appeal had held that the applicants did not intend to intervene in favour of the specialised retail trade to the detriment of the Club, its judgment did not stand up to scrutiny. It had not taken sufficient account of all the circumstances nor attached the correct weight to the evidence adduced. Having regard in particular to the previous reports published by markt intern on the Club (see paragraph 12 above), the Court of Appeal ought to have found that the applicants had not merely provided information as an organ of the press, but had embraced the interests of the specialised chemists trade and, in order to promote those interests, had attacked the Club’s commercial practices. The Court of Appeal ought consequently to have concluded that markt intern intended to act in favour of the specialised trade and to the detriment of the Club. In general, it was extremely unusual for the press and the news media to cite an isolated incident such as the case of Mrs Lüchau - according to markt intern it could even have been simply "a breakdown in communications" - in order to raise immediately in public the controversial question whether this case reflected the Club’s official policy. The Court of Appeal ought to have regarded markt intern’s call for information from its readers concerning negative experiences of a similar type as an even more unusual step, which again revealed the intention to influence the market. (b) Section 1 of the 1909 Act was thus applicable in this case. It was infringed because the disputed statements were contrary to honest practices on the following grounds: "By their publication of the article complained of ..., the respondents acted in a way contrary to honest practices within the meaning of section 1 of the 1909 Act. It is immaterial in this connection whether the statements regarding the witness Lüchau (first head of claim) were true. The mere fact that a commercially damaging statement is true does not necessarily constitute a defence against a charge of acting in breach of the principles of fair competition. According to the rules of competition, such statements are acceptable only if they are based on sufficient grounds and if the manner and extent of the criticism in question remains within the limits of what is required by the situation because it is contrary to honest practices to engage in competition by making disparaging statements about competitors (see Federal Court of Justice, Gewerblicher Rechtsschutz und Urheberrecht ("BGH GRUR") 1962, pp. 45 and 48 - Betonzusatzmittel). In this case, at the time of the publication there was not sufficient cause to report this incident. The exact circumstances had not yet been clarified. The appellant in its reply had agreed to undertake an immediate investigation and to contact Mrs Lüchau in order to clarify the position. The respondents were aware that criticism of the appellant could not be fully justified before further clarification had been sought, as they themselves had described the appellant’s reply as a provisional answer. Accordingly, they should have taken into consideration that any such premature publication of this incident was bound to have adverse effects on the appellant’s business, because it gave the specialised retailers an effective argument which was capable of being used against the appellant with their mutual customers, and one which could be used even if the incident should turn out to be an isolated mishap from which no conclusion could be drawn as to the appellant’s business policy. In these circumstances, at all events at the time of the publication, there were not sufficient grounds for reporting this isolated incident. Such conduct is, moreover, very unusual in business competition. As regards the second head of claim, the appeal on a point of law must be allowed for the simple reason that the sentence: ‘The Club claimed to have no knowledge of the set returned by Mrs Lüchau or of her reminder of June’ can be understood only in the light of the information contrary to honest competition which is referred to under the first head of claim. As, simply, an additional and related item of information, it qualifies for the same legal assessment, in particular because it was liable to strengthen the unfavourable impression which inevitably resulted from the mere recounting of the incident. The Court of Appeal considered that this was no more than an illustration of the fact that the journalist had not been in a position to verify what had been told to him, but this observation conflicts with its earlier conclusion that the wording used expressed at least serious doubts as to the accuracy of the information and that in this case, consequently, the description of events put forward by the appellant was presented as being, probably, unreliable. The Court of Appeal ought therefore to have stated on what basis it reached a conclusion contrary to the ordinary meaning of the words. It did not do so, so that it may be presumed that at least a significant proportion of the readers of the bulletin would interpret the words employed in accordance with general usage, which was liable to show the appellant in an even more unfavourable light. The Court of Appeal’s dismissal of the third head of claim was based on the following considerations. The question put to chemist and beauty store colleagues asking whether their experiences with the Club had been similar to that of Mrs Lüchau or whether they knew of similar cases, which was said to be very important in assessing the Club’s policy, indicated that the respondents considered it possible that a number of cases of this type had occurred. However, this merely represented a value judgment, and as such could not give rise to objections. Yet, under section 1 of the 1909 Act, the decisive issue is not whether the statement is to be regarded as a value judgment or as an allegation of fact. The expression of a value judgment can also exert an unacceptable influence in the field of competition under section 1 of the 1909 Act (see BGH GRUR 1962, p. 47 - Betonzusatzmittel). In this case, there were in any event not sufficient grounds for such a sweeping suspicion. A single case of this type did not constitute evidence for suspecting immediately that the appellant’s commercial policy was fraudulent. It is moreover contrary to honest commercial practices to solicit, in such circumstances and at such an early stage, compromising information. As the respondents were aware of the circumstances giving rise to the criticism that they had acted contrary to honest practices, there can be no reservations, from the subjective point of view, against finding a contravention of section 1 of the 1909 Act. As regards the risk of repetition, regard must be had to the principle laid down by the Federal Court of Justice in its case-law, according to which, where the rules of competition are infringed, there is a presumption of fact that such a risk exists (see Federal Court of Justice, civil cases ("BGHZ") 14, pp. 163 and 171 - Constanze II). This is the case for articles in the press where - as here - the nature of the questions dealt with gives grounds for supposing that the debate was not closed by the publication of the first article (BGHZ 31, pp. 318 and 319 - Alte Herren; BGH, Neue Juristische Wochenschrift ("NJW") 1966, pp. 647 and 649 - Reichstagsbrand). The respondents have not put forward any legally valid evidence that the danger no longer existed." 19. The applicants then appealed to the Federal Constitutional Court, claiming a violation of the freedom of the press (Article 5 § 1 of the Basic Law). Sitting as a committee of three judges, the Constitutional Court decided, on 9 February 1983, not to entertain the appeal. It considered that the appeal did not offer sufficient prospects of success, for the following reasons: "As the Federal Constitutional Court held in its decision of 15 November 1982 (1 BvR 108/80 and others [Entscheidungen des Bundesverfassungsgerichts, volume 62, pp. 230-248]), the requirements which must be satisfied in order for freedom of expression and of the press to override other legal interests protected under statutes of general application are not fulfilled where an item published in the press is intended to promote, in the context of commercial competition, certain economic interests to the detriment of others. This is the case as regards the statements prohibited by the Federal Court of Justice. The second sentence of Article 5 § 1 of the Basic Law did not therefore require a different interpretation and application of section 1 of the 1909 Act from that given by the judgment appealed. As that decision is not based on a violation of the second sentence of Article 5 § 1 of the Basic Law (freedom of the press), it is immaterial that the Federal Court did not, in the reasons given for its decision, expressly address the question of the scope of the freedom of the press in relation to the application of section 1 of the 1909 Act." * * * 20. Mrs Lüchau was not the only customer to complain about the Club. Two others informed the applicants that they had encountered similar difficulties; the first approached them before the publication of the bulletin of 20 November 1975 and the second after it. According to its own statements, the Club sold 157,929 beauty sets between 1 December 1974 and 30 November 1975. In 1975, 11,870 identifiable persons returned the sets and were reimbursed.