Data protection is big in Europe, especially in Germany. It is not possible to process personal data without a data protection law regulation the data processing. And while data protection laws are primarily supposed to protect the individual’s right to determine how his or her data is being processed, data protection has also become a commercial factor. On the one hand, companies are restricted in their ways of advertisement towards their customers. According to section 28 subsection 3 of the Federal Data Protection Act for example, advertisement is dependent on the individual customer’s consent. On the other hand, data protection compliance demands investments in the implementation of data protection standards within the company, for example to lay down the technical and organizational measures demanded by section 9 of the Federal Data Protection Act.
After investing money in data protection and cutting down on the advertisement, it does get annoying to find the competitor profiting from not obliging to the data protection obligations. That has been a problem for companies in energy trading, where companies tried to win back customers from competitors (Higher Regional Court of Karlsruhe, decision of 5/9/2012 – 6 U 38/11; Higher Regional court of Munich, decision of 1/12/2012 – 29 U 3926/11)
In general, disturbances of the level playing field through violations of law can be pursued by competitors under the German Law Against the Unfair Competition (aka Gesetz gegen den unlauteren Wettbewerb, aka UWG) Sections 3 and 4 number 11. The law allows for the competitor’s conduct and potential violations of the law to be controlled by the market. Misdemeanor can be prohibited through injunctive relief and damages can be claimed. The supervisory authority does not have to be involved.
However, in accordance with the purpose of the Law Against the Unfair Competition, the law being violated has to be a so called regulation of market behavior, meaning a regulation protecting the market’s integrity in the interest of the other market participants. The question, whether a law is a regulating market behavior depends on the purpose of the law. Its answer is controversially discussed, as the classification of market behavior as unfair becomes dependent on the violation of a law that itself provides for specific sanctions.
So far, data protection laws have mostly been seen as protecting the individual’s right to self-determine, how others are processing his/ her personal data. With the exception of those sections that are regulating advertisement-related data processings, data protection laws were not found to be regulating market behavior. But basically, the interrelationship between data protection laws and the Law Against the Unfair Competition has been unclear. The decisions of the Higher Regional Courts of Munich and Karlsruhe have not further clarified the relationship.
The Higher Regional Court of Munich held data protection laws to be protecting the individual against infringements of the general right of privacy. According to the judges, the laws do not pursue any other aim, not even as a side effect. Therefore, with the exception of those sections that are specifically advertisement-related, the data protections laws do not regulate companies’ market behavior and do not aim at creating a level playing field.
The Higher Regional Court of Karlsruhe, however, held data protections laws to be aiming at creating a level playing field. That is at least the side effect of the data protections laws, the judges said. And as the aim to protect the market’s integrity in the interest of the other market participants does not have to be the only, not even the pre-dominant aim of a law, data protection laws were (in general) held to be regulations of market behavior. The injunctive relief was granted based on sections 3, 4 number 11 and section 8 subsection 1 of the Law Against the Unfair Competition.