The introduction of a provision for the termination of consumer contracts in § 312 k BGB by requiring a “cancellation button” is new to the German E-commerce market. “FCCA” (The German Fair Consumer Act) stipulates that online companies offer a “cancellation button” on their websites, and on a specific landing page. Failure to implement this button will give consumers the right to terminate their subscription at any time and without termination of the contract, which can be terminated via this button, and the cancellation so generated will have to be treated equally with any other form of cancellation received, e.g. by email or postal mail.
The digital mechanisms are intended to complement the updated EU-wide rules on consumer contracts under the Consumer Rights Directive (‘CR Directive’ 2011/83/EU).
What contracts does the provision apply to?
Introduced § 312k BGB implies a two-step process for cancelling paid contracts of a continuous nature, i.e. those in which companies offer paid services via a website, e.g. subscriptions, streaming services. Note that the provision also applies to contracts concluded before 1.07.2022.
What should the cancellation button look like?
The button should be graphically distinguished and easily reachable by the consumer. It must be located in the header or footer or, in the case of limited screen space, at the top level of the navigation menu. The signature should clearly state “Cancel contracts here” or equivalent.
What does two-stage process mean?
With the first click on “Cancel contracts here,” the recipient must be redirected to a place where they can review the contracts possible to be terminated. The actual termination should happen via a clearly marked button, e.g. “Terminate now.”
If service providers are able to interpret the content of the statement so that there is no doubt as to which subscription is to be cancelled and the subscriber is correctly identified as being entitled to cancel the contract, the termination will have legal effect.
Will the cancellation require the creation of a regular customer account?
Interestingly, effective cancellation is also available for unregistered users. This is a particular convenience for users, who in this case do not have to enter their personal data in the login panel. The German legislator, in order to avoid abuse, should require the consumer to provide certain identifying characteristics. It is also not entirely clear whether the designation of websites in the provision of § 312k BGB also means applications or intermediary interfaces.
What sanctions does the German BGB provide for for failure to designate?
Failure to comply with the implementation obligation will be a violation of consumer protection and will give consumers the possibility to terminate the contractual relationship at any time without notice. It can also be expected that non-compliant suppliers will be exposed to claims for termination on the grounds of breach of fair competition.