WhatsApp has to translate its general terms and conditions into German

The Berlin Higher Regional Court has recently found that the general terms and conditions as well as the data privacy declaration of WhatsApp, which have only been provided in a foreign language, are, without a German translation being provided, not transparent and therefore invalid under German law.

Background and contents of the decision

A claim has been brought against WhatsApp by a consumer protection association enjoying special rights to sue under German law in particular in relation to general terms and conditions. The association had initially complained that WhatsApp failed to disclose its legal representative and failed to provide a second means of communication, which are both necessary under the German rules on telemedia services. Additionally, the consumer association had brought forward that WhatsApp did not provide its general terms and conditions in German.

Initially, the court of first instance had rendered a default judgment against WhatsApp as WhatsApp had not attended the oral hearing. Upon an objection filed by WhatsApp, the default judgment had been lifted and the court of first instance had widely dismissed the claim. Upon appeal the Berlin Higher Regional Court has now found in favour of the consumer protection association and has overturned the judgment of the first instance.

With regard to the necessary information that have to be provided the Berlin Higher Regional Court has found that the German provision transposing Article 5 subsection 1 (c) of Directive 2000/31/EC (e Commerce Directive) requires that the information services provider offer enough information on an additional means of communication other than its e-mail address and has thus followed a judgment of the ECJ (C-298/07). The Higher Regional Court has stated that a lack of information on a second means of communication fulfils the requirement of having an appreciable effect and can therefore be the subject of a challenge under the German Act against Unfair Competition.

With regard to the general terms and conditions used by WhatsApp, the Berlin Higher Regional Court has relied on the German Civil Code which states that general terms and conditions are ineffective or invalid if they unreasonably disadvantage the contractual party which has not introduced the general terms and conditions. One case of such an unreasonable disadvantage specifically stipulated in the law is where a contractual provision is not clear and comprehensible and therefore not transparent. The court has stated that this provision is met where the (commercial) offering targets a broad consumer base in Germany and where the internet offering, ie the website of WhatsApp, is also provided in German. If, in such circumstances, the general terms and conditions and a privacy policy are provided through a link, a consumer does not have to expect that general terms and conditions are only provided in a foreign language, in particular with a complex and extensive set of rules. The court has stated that even though “everyday” English may be widely spread throughout Germany, this does not apply to legal or commercial English as is used in the general terms and conditions of WhatsApp. Therefore, all clauses of these general terms and conditions are intransparent and disadvantage all German consumers (except those that speak English as their mother tongue or have particular language skills) and, consequently, are invalid as long as they are not provided or translated in(to) German. This applies irrespective of the contents of the general terms and conditions.

Commentary

The decision of the Berlin Higher Regional Court highlights that e-Commerce activities need to be handled with care. The court has confirmed the importance of following the specific rules applying to information that have to be provided.

In respect of general terms and conditions, the court’s decision clarifies the requirements for general terms and conditions and highlights the need of foreign companies to ensure compliance for their general terms and conditions. The language of general terms and conditions is only the first step in this process. Companies that do not provide their general terms and conditions in German or at least with a German translation run the risk that their general terms and conditions are not valid and therefore not applicable at all. Invalid terms and conditions have several implications ranging from issues concerning the limitation of liability to contractual obligations of the parties, such as the provision of consent or approval for the use of pictures or other content generated by users. Therefore, companies may find themselves in a situation where they cannot enforce their general terms and conditions against German consumers or, even worse, are subject to litigation with either their contractual partners or, as in the case of the Higher Regional Court in Berlin, by consumer protection associations which are quite active in this field.

Additionally, the decision also has implications with regard to the use of data collected on the users, as consent forms or data privacy policies are also subject to review under the German rules on general terms and conditions. Without a German translation such consent forms and data privacy policies may also be deemed invalid. In light of the chances brought about by the General Data Protection Regulation as well as the recently introduced rights of consumer protection associations to also enforce data privacy rules, this compliance in this area becomes a higher priority for companies. Additionally, the judgment does not concern questions around the German Telecommunication Act where Over-the-Top communication services face additional data privacy rules. Details hereof are discussed here.

Even though the court has not granted leave to further appeal, WhatsApp still has a chance to bring the case before the German Federal Supreme Court and, therefore, it remains to be seen whether additional guidance will be available from the highest German court.