Wednesday, April 30, 2014

BGH: Screen Scraping Does Not Constitute Unfair Competition

German Federal Supreme Court (BGH) is in a new case on meta search engines and screen scraping -- Flugvermittlung im Internet, I ZR 224/12 -- again proving its superior expertise and better sense of the real world compared to the Court of Justice of the EU.

In a case involving notorious litigant Ryaniar who sued a meta search engine Vtours, it comes to the conclusion that a meta search engine which carries out a booking on behalf of the consumer, or even in its own name (integrated booking), does not per se engage in an act of unfair competition.

The case started some time ago as both sui generis database right and unfair competition law case. The second instance, Regional Court in Hamburg (OLG Hamburg, 5 U 38/10), accepted protection of Ryanair's database, but rejected that it would be infringed by the practice of screen-scraping relying partially on the argumentation of BGH's Automobil-Onlinebörse case. The Hamburg court however, upheld the unfair competition claims arguing that if a reseller conceals his intent to resell to supplier (so called Schleichbezug), he acts unfairly as the supplier has right to a freely choose for direct or selective distribution system. As mentioned above, the decision concerned an integrated booking system. This is important because the Hamburg Court explicitly opined that a non-integrated booking system (e.g. Skyscanner) could be indeed legitimate. This all happened prior to infamous Innoweb ruling of the CJEU. The decision, where CJEU labelled as "nearly parasitic" even a comparison meta search engine that was referring consumers always back to the source website.

Because Ryanair appealed further, the BGH was asked to review the case. But it did not review all the claims that were put forward initially, but only a claim related to unfair competition. BGH thus could not deal with a open conflict of its own case law (Automobil-Onlinebörse case) and one of the CJEU (Innoweb case). Today, BGH issued its press release that reads:

Der Bundesgerichtshof hat eine wettbewerbswidrige Behinderung der Klägerin gemäß § 4 Nr. 10 UWG verneint. Im Streitfall führt eine Gesamtabwägung der Interessen der Mitbewerber, der Verbraucher sowie der Allgemeinheit nicht zu der Annahme, dass die Klägerin durch die beanstandete Vermittlung von Flügen durch die Beklagte ihre Leistungen am Markt durch eigene Anstrengungen nicht mehr in angemessener Weise zur Geltung bringen kann. Erforderlich ist insoweit eine Beeinträchtigung der wettbewerblichen Entfaltungsmöglichkeit, die über die mit jedem Wettbewerb verbundene Beeinträchtigung hinausgeht und bestimmte Unlauterkeitsmomente aufweist. Allein der Umstand, dass sich die Beklagte über den von der Klägerin in ihren Geschäftsbedingungen geäußerten Willen hinwegsetzt, keine Vermittlung von Flügen im Wege des sogenannten "Screen-Scraping" zuzulassen, führt nicht zu einer wettbewerbswidrigen Behinderung der Klägerin.

Ein Unlauterkeitsmoment kann allerdings darin liegen, dass eine technische Schutzvorrichtung überwunden wird, mit der ein Unternehmen verhindert, dass sein Internetangebot durch übliche Suchdienste genutzt werden kann. Einer solchen technischen Schutzmaßnahme steht es aber - anders als es das Berufungsgericht angenommen hat - nicht gleich, dass die Klägerin die Buchung von Reisen über ihre Internetseite von der Akzeptanz ihrer Geschäfts- und Nutzungsbedingungen durch Ankreuzen eines Kästchens abhängig macht und die Beklagte sich über diese Bedingungen hinwegsetzt. Der Bundesgerichtshof hat auch nicht angenommen, dass die Interessen der Klägerin die der Beklagten überwiegen. Das Geschäftsmodell der Beklagten fördert die Preistransparenz auf dem Markt der Flugreisen und erleichtert dem Kunden das Auffinden der günstigsten Flugverbindung. Dagegen wiegen die Interessen der Klägerin daran, dass die Verbraucher ihre Internetseite direkt aufsuchen und die dort eingestellte Werbung und die Möglichkeiten zur Buchung von Zusatzleistungen zur Kenntnis nehmen, nicht schwerer. Das Oberlandesgericht wird nunmehr zu prüfen haben, ob der Klägerin Ansprüche wegen Irreführung und nach den Grundsätzen des wettbewerbsrechtlichen Leistungsschutzes zustehen.
For my non-German speaking readers. The Court rejected that operation of a meta search engine with an integrated booking system would constitute an act of unfair competition only because the source website did not allow this practice in its general terms and conditions. According to the PR, the Court came to this conclusion after balancing the interests of all concerned parties, including consumership at large. The Court explicitly mentions positive effects that price transparency has on competition. Interestingly enough, it also goes so far as to say that the interests of Ryaniar to preserve its income from the advertising and to preserve a chance to sell complementary products does not by itself justify contrary judgement [sic!]. Considering the fact that sui generis database protection is in fact unfair competition law derivative, this language is strikingly opposing what the CJEU assumed in its Innoweb ruling.

In this respect I can only refer the reader to my working paper The End of Meta Search Engines in Europe? (SSRN link), which addresses the exact reasons why I believe that BGH is right and CJEU wrong. This is essential. If German courts follow its jurisprudence of granting sui generis protection to Ryanair's database, which is rather unusual among the Member States, then they would be bound by Innoweb to find for an infringement. Fortunately they can prevent such outlawing of meta search engines by increasing its requirements for protection in a similar way as most of the other national European courts do.

Coming back to BGH decision, the Court also notes that if Ryanair would apply technical protection measures, it could have an actionable breach of unfair competition law rules. So if Ryanair would for instance implement CAPTCHA to prevent robots from accessing its sub-pages, then it could possibly claim a violation. The Court also notes that the lower court must now asses whether the meta search engine did not mislead consumers by its practice, and if the plaintiff does not qualify for some extra protection against appropriation based on unfair competition law (wettbewerbsrechtliche Leistungsschutz). This last mentioned layer of protection is in Germany granted as an extra supplementary protection on the top of some formalized IP-rights in some cases. Given the position of the Court in respect to lost benefits of the plaintiff, I think it is unlikely that the plaintiff could prevail here. However, the outcome of the case as such is very questionable because of the already mentioned change in the jurisprudence by the Innoweb ruling (I am not sure if the lower court can still change his mind on that point). Any comments on procedural situation from my German colleagues are most welcome.

I will update the post once the text of the decision is out. In the meantime, here is the abstract of The End of Meta Search Engines in Europe?:

Technology behind the meta search engines supports countless number of services ranging from the price and quality comparison websites to more sophisticated traffic connection finders and aggregators. The meta search engines generally increase market transparency, intensify competition and decrease transaction costs of consumers. Because they are also capable of disturbing established business models of the indexed websites, number of lawsuits were filed against the various operators of meta search engines in the last years in Europe. The scrutiny of the operation of some of them was recently even escalated to the Court of Justice of the European Union. In December 2013, the Court handed down its Innoweb C-202/12 ruling, where it held that operation of meta search engines is likely to infringe the database right of the indexed websites, assuming that they constitute a protectable subject matter. This paper therefore analyses legal and practical consequences of this landmark decision for the innovation, consumers and e-commerce in the comparative context.

The investigation then comes to the following conclusions. Meta search engines sourcing product and price information from websites that directly sell services/goods, are not likely to be affected by the decision due to lack of database protection of its parts. Meta search engines that on the other hand source user generated content, are likely to be affected and will need to acquire the licenses from the database owners. It is submitted that the Innoweb decision may lead to the meta search engines shifting more to two sided market configuration, where suppliers who value the users more than users commonly subsidize the service for users. As a consequence, this pricing structure of a two sided market can render this newly acquired blocking right based on the database right valueless. On the other hand, the existence of an exclusion right might increase the barriers-to-entry by imposing a need of concluding of licensing deals for new entrants who have to solve the “chicken-egg” problem, what may negatively impact the competition between different meta search engines and thus ironically foster position of meta search incumbents.

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