Conquering the German Market

In light of Brexit, we’re looking at the natural export partners of UK based businesses. Stephens Scown have a broad network of international advisers who we will be speaking with to get the inside line on some of the key things to look out for when exporting.

One of the strongest EU economies is Germany, where a high GDP and comparatively strong market growth mean a healthy and enticing market for UK business to export goods and services.

We’ve spoken to Eckard Nachtwey of Nachtwey IP to identify what it is businesses trading in, or considering trading in, Germany should be looking out for.

Stephens Scown: The majority of our clients who trade in Germany do so via their website. Is there anything in particular that German law prohibits or enforces when it comes to online shopping?

Eckard:  Even though it is not required to have a German subsidiary having its place of business in Germany, a proper home page has to be carefully prepared in case business is done in Germany. Although not all information needs to be provided in German (although there is good commercial reason for doing so), websites available in Germany must display the following information:

  • The name of the business as it is registered;
  • The address of the business (P.O. Box-address are not permitted);
  • The name of the all of the general managers of the business; (directors for a company, partners for a partnership);
  • The mailing address;
  • The telephone number;
  • The VAT number (where applicable);
  • The number under which the business is registered and the place/court where the registration took place (in the case of a company or partnership) and, if the company has to apply for a permission to carry out its business, the authority which has granted the permission to carry out this business.
  • Further, if legal texts are provided such as general terms of conditions, these are to be displaced in the German language.

Stephens Scown: What about data protection and privacy?

Eckard: The German laws for data privacy are some of the strictest in the European Union. On the plus side, that means compliance with the German data protection directives will result in meeting most requirements in the other European countries.

For example, the collection, storage and use of personal data is, in general, prohibited. The ability to collect, store and use data can only be from consent or from a statutory exemption. Accordingly, with regard to the use of these data it has to be verified as to whether there is a statutory exemption or whether the person concerned has given its consent.

The persons concerned are entitled to right to information, right to rectification, cancellation right and banning. Accordingly, the corporations have to make available systems which allow the persons concerned to give this information and/or by which systems the above rights of the persons concerned can be carried out.

A further principle is data avoidance and data economy. This principle means to collect no or as little as possible personal data. As far as technically possible these data are to be used in an anonymised or pseudonymised way. It is mandatory for companies to maintain and adhere to their data privacy declaration. This declaration should include which data are being recorded and/or processed, why and for what purposes and for how long.

Stephens Scown: What if you collect the data for internal analysis, or intragroup transfer?

Eckard: German law prohibits intragroup transfer of data without the consent of the data subject.

When using tools like Google Analytics, the entity using it has to indicate this in the data protection declaration which is published on the home page; the same applies to plug-ins like Facebook and Linked-in and all other cookies. For a foreign business, this requirement sounds rather strange. However, since there are fines of up to 50,000.00 EUR for any violation of the regulations of the law, it seems to be wise to follow these strict rules.

It is also worth noting that the German government employ software to search for sites which use plug-ins like those described to aid enforcement.

Stephens Scown: We have a similar system in the UK where sites are searched for cookies and the required notices – the Information Commissioners Office (ICO) can then use this information to enforce against a business which fails to comply with legislation. Is there any equivalent to the ICO in Germany?

Eckard: Yes. There are governmental bodies in all the federal states of Germany. They have power to enforce fines or criminal sanctions on businesses or individuals who breach the law. But in Germany competitors also have the right to take legal action if a competitor does not comply with the rules.

Stephens Scown: The ICO also make recommendations and best practice principles to aid businesses comply with the law – does the same thing happen in Germany?

Eckard: Indeed, but some of the advice is more prescriptive. For example, an internal directory of privacy procedures must be kept and must detail:

  1. Name and company of the responsible company;
  2. Proprietors, directors, managing directors or other appointed persons and persons who are responsible for the data processing;
  3. Address of the responsible company;
  4. Purpose of data collection, processing and use;
  5. Description of the persons in charge and the data and data categories;
  6. Recipients or categories of recipients to whom the data may be released;
  7. Scheduled dates for data deletion;
  8. Information about the planned data transmission to other countries; and
  9. A general description by which it is possible to assess as to whether the action to ensure data security is appropriate.

Stephens Scown:     You mentioned earlier the fines and criminal sanctions that can be imposed against those who breach German data law; what would you say is the biggest shock to non-German businesses trading in Germany?

Eckard: In addition to the requirements we had discussed, the laws regarding selling where goods or services are sold via the internet have to be carefully observed, e. g. most important here is the right of recession granted by the European regulation on distance contracts and which every consumer is entitled to make use of. So that bit is fine, as it’s the same in the UK. However, this is a very strict prerequisite in Germany and there have been a lot of lawsuits in the past regarding the requirements of the right of recession for consumers in Germany.

To help, the German government had implemented binding wording for proper information on the right of recession.

Because German is the official language in Germany, there is only German wording available for the proper information on the right of recession. There had been a lot of lawsuits in the past due to the fact that the wording of the information on the right of recession has been changed and it is therefore recommended to only use the information provided by the government on the right of recession in any communication with customers in Germany. Further, it has to be mentioned that anyone who operates a website which offers goods or services is obliged to provide a link to the European Online Dispute Resolution Platform.

If you currently trade with Germany, or have plans to start trading in that country, it would be well worth your time to review your website to ensure it complies with the issues highlighted in this article.

If you’re trading in overseas (including allowing German customers to your website to purchase goods or services) or considering selling goods or services outside the UK and would like to discuss the above, or other issues in more detail email  international@stephens-scown.co.uk.

Eckard Nachtwey of Nachtwey IP

Eckard was born in Bremen in 1960. He studied at the University of Kiel and specialized in commercial and intellectual property law.

During his stay abroad at a law firm in Hong Kong, Eckard gained extensive expertise in the field of protection of industrial property rights. Eckard worked in the Trademark Department of the Pharmaceuticals Division of the BASF chemical group and gained special experience concerning the requirements of a large corporate group in connection with trademark law. Eckard has been a legally qualified lawyer since 1994. He is a member of the German Association for Industrial Property Rights and Copyrights (GRUR).