According to a recently published decision of the German Federal Supreme Court (judgment of 16 May 2013, I ZR 216/11) eBay shall be liable for copyright infringements of third parties if it actively promotes the infringing offers by its own marketing campaign. In such cases the general liability privilege for information service providers, which arise from Section 7 and 10 German Telemedia Act, does not apply and eBay must observe increased due diligence requirements.
In the concrete case (Kinderhochstühle im Internet II), a third party seller offered for sale on eBay certain chairs that were found to infringe the plaintiff’s copyright. The plaintiff alleged that eBay was liable for copyright infringement (under the so called “Störerhaftung” or liability for interference, a German legal concept similar to contributory liability) based on its promotion of the third party’s sales via a Google AdWords campaign run by eBay. When Google users entered the name of the chairs in the search engine, Google placed an ad on their page that lead users directly to the corresponding third party offer on eBay. At the time eBay started the AdWords campaign, it had already been notified through other sellers that the third party’s chairs were infringing.
Against this background the court decided that the liability privilege under German law, which gives information service providers a general safe harbor for third party infringements, did not apply. Due to its promotion of the chairs through Google AdWords, eBay was no longer acting as a neutral intermediary and took on a more active role. The court found that, because eBay took such an active role, it had to comply with an increased duty of care. Where the company takes such an active role, it will be required to manually review every offer linked to it through the Google AdWords campaign. Automatic control would not be sufficient, especially where there is evidence that eBay—or another similarly situated intermediary—knows of previous allegations of copyright infringement with respect to the same products and the same seller.
In conclusion, according to the court, such increased due diligence duties are not disproportionate because eBay no longer occupied a neutral position as an intermediary in the sense of Section 7 and 10 German Telemedia Act. Instead, eBay rather actively promoted the offers of a third party. Due to this fact, the general liability privilege of information service providers does not apply in this case. This implies for similarly situated intermediaries that they are required to manually review every offer when they actively link them to a specific promotion campaign, e.g. through Google Adwords.
The author of this blog post, Anna Zeiter, is an LLM candidate at Stanford Law School and a qualified German attorney. She can be reached at azeiter at stanford.edu.
Photo Credit: PercyGermany