Jurisdiction for unfair competition claims against a contractual partner

1. Background and facts

The plaintiff, a journalist based in Berlin, operated a channel on the internet platform of the defendant, a company based in Ireland. The defendant's platform serves primarily as a video portal and is used by various private and commercial users, including journalistic media.

The plaintiff discovered that its channel had been blocked by the defendant. He then applied to theLandgericht Karlsruhe (Karlsruhe District Court) for a preliminary injunction ordering the defendant to lift the block and to refrain from blocking, deleting or terminating his account in the future (“injunction request (a)”). The plaintiff claimed that the blocking of his channel impaired his competitive development and therefore constituted an unfair, targeted obstruction within the meaning of Section 4 no. 4 of theGerman Act against Unfair Competition (UWG).

In addition, the plaintiff requested that the defendant be prohibited from using certain clauses of its “Termsof Use”, which only apply to users residing in Germany (“injunction request (b)”). These clauses were inadmissible under theLaw on General Terms and Conditions of Business and their use was therefore prohibited under Section 3a UWG in conjunction with Section 307(1) of theGerman Civil Code (BGB). The illegality arose from the fact that the defendant reserves the right to remove content and block accounts at its own discretion.

The Karlsruhe District Court dismissed the application for a preliminary injunction as partially inadmissible and otherwise unfounded. The plaintiff’s appeal was unsuccessful (OLG Karlsruhe, Urt. v. 8.Mai 2024,Az.6U198/23).

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2. Legal assessment by the court

The court carries out a textbook examination of the relevant jurisdiction standards. The place of performance (Art. 7(1) Brussels Ibis Regulation) was not apt to establish jurisdiction of the Karlsruhe courts as the defendant had to fulfil its contractual obligations towards the plaintiff at its registered office, i.e. the place of performance was located in Ireland. Accordingly, the courts only had jurisdiction if, pursuant to Art. 7(2) Brussels Ibis Regulation, the place where the harmful event occurred was to be localized within its district.

In order to examine jurisdiction for the asserted claims based unfair competition law, the court then applies the Wikingerhof decision of the European Court of Justice. Accordingly, the question of whether an action between contracting parties is to be regarded as contractual within the meaning of Art. 7(1) Brussels Ibis Regulation or a tortious act within the meaning of Art. 7(2) of the Brussels Ibis Regulation depends on whether the obligation on which the action is based is contractual or tortious in nature. The action is contractual in nature if an interpretation of the contract concluded between the parties appears “indispensable” in order to determine whether the conduct in question is lawful or unlawful.

Against this background, the court declined jurisdiction for the injunction request (a) seeking the lifting of the channel block. Although the claim was based on unfair competition law and therefore, in principle, a tortious claim, the plaintiff was seeking an injunction against the defendant’s failure to perform its contractual obligations. Without a contractual relationship, there was no right to use the platform. The question of whether the blocking of the channel constitutes an unfair obstacle therefore depends on the interpretation of the contract concluded between the parties. This could only be the case if the plaintiff could invoke a legal obligation to conclude a contract (e.g. under antitrust law).

In contrast, the HigherRegional Court of Karlsruhe considered that Art. 7(2) Brussels IbisRegulation was applicable to the injunction request (b), which was directed against the use of certain general terms and conditions. This was because the validity of the general terms and conditions was not determined by the contractual agreement between the parties, but by an examination pursuant to Sections 305 et seq. BGB. An interpretation of the existing contract between the parties was not necessary.

In the subsequent localisation of the place where the damage occurred, the court assumed that this is the case wherever the alleged infringement has an effect on the market. As injunction request(b) seeks an injunction against the use of the clauses vis-à-vis anyone, and those clauses are used in relation to users throughout Germany, the Karlsruhe courts (also)have jurisdiction. In this respect, the court points out that a claim for an injunction relating solely to the use of the general terms and conditions in the contractual relationship with the plaintiff would only have been successful at the plaintiff’s place of residence (Berlin).

On the merits, however, the court denied the existence of a concrete competitive relationship and thus the plaintiff’s standing. As the decision was made in a preliminary injunction procedure, there is no right to further appeal and the decision is final.

3. Comment and practical advice

The decision, which is worth reading in every respect, contains a remarkable, textbook examination of international and local jurisdiction – not only in the context of injunction proceedings.

From the point of view of a German plaintiff or claimant, it is generally desirable to be able to bring cross-border disputes before a German court. This is familiar territory and one can often rely on lawyers one already knows. In practice, however, the pitfalls of the law of jurisdiction, which is characterised by the extensive case law of the European Court of Justice, are often underestimated. In disputes between contracting parties, for example, the decisive factor in determining the applicable jurisdictional standard is whether an interpretation of the contract is “indispensable” to clarify the legality of the conduct complained of. This is particularly true when a breach of a statutory obligation is alleged. In addition to the alleged violation of unfair competition law, this may be relevant, for example, in the case of the use of clauses in a contract that are alleged to violate antitrust law.

From the plaintiff's point of view, therefore, care must be taken in the choice of forum in order to avoid the risk of a dismissal for lack of jurisdiction, which is always inconvenient but, in the case of injunctions, can cost crucial time due to the running urgency period. On the other hand, from the defendant's point of view, it is worth checking carefully whether the court seised actually has jurisdiction to hear the case – not only, but especially, if the company's registered office is not in the country of the court. In the present case, only the courts at the defendant's registered office in Ireland would have had jurisdiction to unblock the account - regardless of whether the claim was based on breach of contractor unfair obstruction.