Marie Helen Pichler I. Introduction The internet has led to a new dimension of competition law. Until recently, the competition law has been governed by national legislation and jurisdiction. The cross-border dissemination of commercial information via satellite led already to conflicts between the globalisation of marketing techniques and the territoriality of competition law. Due to the internet, the borders between national economies are going to erode and diffuse. Companies which didn’t compete in the past now find new competitors in the net. Territorial limitations of distribution agreements are losing their strength. New marketing techniques arise, including the use of hyperlinks, frames and e-mail. In addition, it becomes more and more complicated to enforce law. It remains unclear which courts are competent in the area of competition law and how they can execute their decisions in an international context.
The reporters are not responsible for commenting upon developments in the area of EU law. The international reporter Prof. Dr. Thomas Hoeren will summarize existing directives and decisions which might affect online marketing.
II. Questions of material competition law 1. The use of use e-mail for advertisement: (“spamming”)
Is there any obligation to mark e-mail advertisements as such?
Is it allowed to send advertisements via e-mail with the consent of the addressee?
Which effect has the clear opposition of the user on the legality of spam mails?
Can access providers restrict the use of spams, i.e. by refusing to transfer these mails to the addressee?
How is the legal situation affected by the fact that that the e-mail has been sent from abroad?
f) Are users allowed to send flame mails to the spamming company?
2. The use of hyperlinks
Is it lawful to set hyperlinks to websites of competitors?
Which effect has an express statement of the competitor prohibiting or restricting hyperlinks to his homepage?
Are hyperlinks supposed to refer to the main homepage?
Are there legal restrictions as to inline linking (i.e. the use of frame technology in a way that the user has the impression to read a specific homepage without noticing that he has already been linked to another homepage)?
3. Limitations for online marketing of specific products
Are there any restrictions for the online marketing of tobacco products?
Are there any restrictions for the online marketing of alcohol?
Are there any restrictions for the online marketing of medical products?
d) Are there any specific restrictions for the online marketing of other products?
4. Limitations for online marketing to specific persons
Are there any restrictions for the online marketing as to minors?
Are there specific restrictions for lawyers, doctors or dentists which are interested in using the internet for the dissemination of commercial information on their services?
c) Are there other regulations which are aimed at or have the effect of restricting the online marketing for specific persons?
5. To which extent are there any information duties with regard to commercial websites?
as to taxation
as to the identity of the content provider
as to other relevant commercial data
6. Netiquette and self-regulation a) Do you know of specific codes of conduct for online marketing in your country?
b) How do these codes of conduct influence competition law?
c) Is there a chance to enforce these codes?
d) How do you estimate the value and importance of these codes?
III. Procedural rules (Private International Law/International Civil Procedure Law) 1. Which principles are applied to solve problems of private international law? a) Which are the general rules of your country’s international private law (law of conflict of laws) applicable to unfair competition (e.g. int. private law of torts) and what do these rules state?
b) Are there any specific limitations or modifications to these rules with respect to unfair competition, e.g. the sole application of the substantial law of the marketplace?
c) If so, are there any proposals how to determine or restrict the marketplace with respect to cross border electronic commerce over the internet?
d) May domestic competitors be subject to the national rules of competition law, even though they only advertise and compete in foreign markets?
e) In the case of an act of unfair competition in more than one state, could a competitor meaning a competitor in all of these states) recover damages applying one single substantial law, or would his claim be governed by a bundle (mosaic) of different substantial laws, e.g. the law of each marketplace for the damage occurring in that state? Would domestic courts have jurisdiction with respect to the total claim?
f) Is there any case law in your country on the influence of Art. 30 EC Treaty on national competition law?
g) Is there any discussion about a “country of origin principle” to determine the applicable competition law in cross border electronic commerce?
Is a choice of law between competitors possible in unfair competition matters?
2. How can national regulations be enforced in other states? a) Which are - apart of the Brussels convention - the principles of international jurisdiction in unfair competition cases in your country; is there a distinction between general and specific jurisdiction? Are there specific limitations or modifications with respect to unfair competition law (e.g. jurisdiction is limited to the country/countries of the marketplace)? Is there a forum non conveniens doctrine or a similar doctrine and, if so, is it relevant in unfair competition cases?
b) Are there different rules on jurisdiction in interim or injunctive proceedings?
c) Which measures of interim or injunctive relief are available in your country in unfair competition cases? Are these measures available for foreigners to the same extent as they are for domestic plaintiffs?
d) Will your courts grant cross border injunctions? That means will they render prohibitory injunctions with respect to a conduct occurring in a foreign state?
How are your court’s prohibitory injunctions or prohibitory judgments/restraint orders (i.e. judgments stating the duty to refrain from doing something, e.g. an act of unfair competition) enforced? Can they be enforced in your country, even though the conduct that is subject to the prohibitory order is taking place in a foreign state?
f) Will your courts decide at all on a conduct of unfair competition taking place in a foreign country? Will your courts apply foreign law in these cases?
g) If your courts have jurisdiction in an action for damages with respect to unfair competition taking place in your country and other countries, will they also award damages that occurred in the other countries (may be applying a bundle of substantial laws) or will they limit their judgment and restrict their jurisdiction to the damages that occurred within their territory (parallel to the EC´s Shevill decision)?
h) Is there discussion about alternative dispute resolution in unfair competition matters related to the internet?
i) Is a choice of forum between competitors possible in unfair competition matters?
1. The use of use e-mail for advertisement: (“spamming”)
Several companies use e-mail for sending advertisement to users. The internet allows to send e-mails to thousands of people within seconds and without any special costs. Special address agencies already sell the e-mail addresses to companies interested in online marketing. However, users often feel annoyed by these so-called spams. Some court decisions seem to suggest that e-mail advertisements can only be sent on demand. Other people think that it is enough to mark spams with a special sign for the protection of consumers. In addition, there are access providers which try to stop the transmission of spams in advance.
Internet and the Austrian Media Law
The Austrian Media Law has been drafted in 1981 relatively independent from the means of communications (e.g. paper) with a view to encompass future means of communication. The legal definition of "Medium" in Section 1 (1) N° 1 Austrian Media Law (MedienG) stresses the communication to a bigger circle of people by way of mass production or mass distribution. A bigger circle of persons means that the number of persons is not a priori limited and has a significant size.
According to a decision of the State Court of Vienna dated 26 November 1997, (OLG Wien, 24 Bs 291/97, MR 2/98, 44), the world wide web (www) is to be seen as a "Medium" (a publication) within the meaning of Section 1 (1) N° 1 of the Austrian Media Law (MedienG 1981). The same applies when a journal is published in parallel on the web with a printed edition. The decision stated that the World Wide Web is without any doubt a medium by which data are communicated in text and images to a bigger circle of persons. The decision thus likened a publication on the internet (printed text) with a journal and applied the Media Law provisions accordingly.
An internet home page is directed to a bigger circle of persons which qualifies it as a medium or at least an “auxiliary medium” within the meaning of Section 50 N° 4 Media Law (Hanusch Kommentar zum Mediengesetz 1998, 12). Other authors make the qualification of an internet homepage as a medium conditional upon an actual communication to a bigger number of persons, i.e. whether and how many internet users are actually visiting the site (Mayer-Schönberger Das Recht am Info-Highway 1997, 117).
Electronic mail is not a system relevant from a media law point of view if it consists of one-to- one communications in small groups. The regular communication of data similar to newsletters from one author to a bigger group of receivers might be a media service that should be treated similar to a newspaper or journal (Jaburek/Wölfl Cyberrecht, 1997, 47 f.).
However, since the State Court decision defining the www as a “Medium” within the meaning of the Media Law concerned only the provisions concerning privacy and non-disclosure of identity of persons in the reporting of crimes, it is still doubtful whether all other provisions of the Media Law should be applied to the edition of home pages and all other services in the internet.
a) Is there any obligation to mark e-mail advertisements as such? An obligation to mark messages applies only to periodical media. A "periodical medium" is a medium which is distributed in the same or comparable form at least four times a year (Section 1 (1) N° 2 Media Law). Section 26 Media Law requires notices, recommendations and other reports that are published against remuneration to be marked as "Advertising", "Insert against remuneration" or "Announcement" except in cases that there is no doubt whatsoever by the choice of its form or layout that the message was published against remuneration.
For foreign media there is no such obligation according to Austrian law (Section 50 Media Law).
There is no specific rule yet that the sender of an e-mail has an obligation to mark them as advertising messages. Insofar as electronic mail can be considered as a periodical medium it e-mail advertising must be marked as such.
The application of Section 26 Media Law to periodical publications on the internet has not yet been firmly established since the definition of medium is based on a medium in a physical form which is distributed in a physical form ("Medienwerk"). Certain authors therefore believe that there is no equivalent notion yet for a periodical medium published in electronic form (Hanusch op. cit., 14). They expect however that this uncertainty will be removed by the next amendment to the media law. A specific proposal to incorporate electronic media into the Media Law exists already. For other authors it is already clear that opinion-forming contents, distributed at least four times a year on the internet constitute a periodical medium within the meaning of § 1 (1) N° 2 Media Law (Jaburek/Wölfl op.cit., 49).
A recent state court decision concerning the obligation to mark TV advertising as such (OLG Wien 28/1/1999, 15 R 50/98b MR 2/99, 108) states that Section 26 Media Law covers publications in periodical media, including electronic media (OLG Wien 28/1/1999, 15 R 50/98b MR 2/99, 109). The Supreme Court (29/9/92, 4 Ob 79/92 – Product Placement, MR 1992, 207) had already clarified that printed media and electronic media are competitors with respect to paid advertising. The infringement of obligations to mark advertising is considered a breach of law that contravenes public policy within the meaning of Section 1 Unfair Competition Act (MR 1991, 75; MR 1992, 39, 255).
The decision referred to broadcasting as electronic media. Certain authors think that this term might also encompass internet publications such as online services or e-mails distributed by way of mass distribution if they are publications directed to the general public. Thus one could assume an obligation to mark advertising messages via e-mails as such for information offerings that are created and fed into the web in Austria and that are renewed more than three times a year (Jaburek/Wölfl op.cit., 55). This view is however not firmly established in Austria for the reasons set out above under a).
b) Is it allowed to send advertisements via e-mail with the consent of the addressee? Certain authors draw an analogy to the judgement of the Austrian Supreme Court (OGH 28/120/1997, 4 Ob 320/97 f, WBl. 1998,98 = JBl. 1998, 324) as well as an analogy to the provision in the Telecommunications Law (Section 101 Telekommunikationsgesetz "TKG" BGBl. 1997/100) concerning the illegality of telefax advertising and argue that unsolicited advertising via e-mail is therefore not admissible as well (Pfersmann, commentary to the Supreme Court decision OGH 28/10/1997, 4 Ob 320/97 f, JBl. 1998, 324, 325).
Others think that e-mail advertising should be allowed in principle as a communication means for advertising messages (Thiele Das Internet in der anwaltlichen Berufspraxis, AnwBl. 1998, 670, 674). It is argued that the owner of an e-mail address has the possibility to control whether to admit the intrusion into his privacy whereas the owner of a telefax is limited to tolerate passively the transmission. There are filter programmes available which are able to prevent the molestation of the potential receiver. Since there is interim saving on the central server of the provider - i.e. the "electronic mailbox" - the analogy to advertising via written mail or mailbox is seen as more adequate to judge the conformity with competition law. That is why this kind of advertising is seen as admissible due to its inherent information value (Thiele op.cit. 675; Bydlinski, Zivilrechtliche Zulässigkeitsgrenzen bei der Verteilung von Werbematerial „an der Wohnungstür“, ÖJZ 1998, 641 ff.).
For others this actions are seen as a form of robbery (transmission service, saving space, time to download, read and destroy the message - since these are costs that are borne by the obligatory receiver). In a test case the Viennese telecommunication expert Dieter Zoubek received on 26 September 1997 an unsolicited spam with a bigger graphic attachment. Zoubek made a notice to the district attorney of Vienna describing the case. The district attorney immediately informed him that it was not competent (WCM N° 107/ Mail 1999,12). A notice to the Austrian telecommunication authority in autumn 1997 on the grounds of Section 101 TKG was not successful either. Section 101 TKG forbids unsolicited calls and telefaxes. But - since Section 101 TKG only mentions "calls - including the transmission of telecopies - for advertising purposes" - e-mails are not covered by this provision in the TKG. In spring 1999, i.e. 18 months later, Zoubek received the information from the telecom authority that the proceedings had been discontinued. Since e-mails are not explicitly mentioned in the law they cannot be seen as "calls" within the meaning of the TKG (Alfred Ruzicka, Director of the Fernmeldebüro Wien, NÖ und Burgenland, as cited by Zoubek in WCM N° 107/Mai 1999, 12).
Another legal basis to stop unsolicited e-mails lies however in Section 75 (1) TKG that apparently had not been considered in the above proceedings. Section 75 TKG forbids the misuse of telecom equipment and telecom terminals. Misuse includes
any gross vexation (”grobe Belästigung”) or intimidation of other users.
The provision does not use the term “calls” but the wider term of use of misuse of telecom equipment and telecom terminals which could certainly emcompass e-mails. Spams might thus be stopped if the conditions of Section 75 TKG are fulfilled (breach of a specific law; or evidence of serious vexation).
Some authors see the technical avoidance of spams as the best solution and advocate the use of anti-spam filter programmes (Pankart, Die dunklen Seiten der E-mail, Datagraph 4/1998, 21).
c)Which effect has the clear opposition of the user on the legality of spam mails? If the advertising e-mail sender has received an explicit refusal to give the requested permission for the reception of e-mail advertising than the clear opposition of the e-mail receiver has the effect of spams being in breach of competition rules. This means also that the e-mail sender has an obligation to request such a permission from the e-mail receiver. Should the sender omitthis request the first time he sends the e-mail to a particular user than the spams are equally inadmissible (Thiele op. cit. 675, following the opinion of Funk, Wettbewerbsrechtliche Grenzen von Werbung per E-mail, CR 1998, 411 ff.)
d)Can access providers restrict the use of spams, i.e. by refusing to transfer these mails to the addressee? Section 75 (2) TKG specifies that “owners of telecom equipment and telecom terminals must – as far as reasonable - take all necessary measures to exclude any misuse. Misuse of telecom equipment could lie in the serious vexation of other users of telecom equipment through the sending of unsolicited e-mails. Service providers which provide only access to telecom services are not deemed to be “owners” within the meaning of this sub-clause. “ The parliamentary materials confirm that mere “access-providers”, offering access to the internet, are not liable in accordance with this provisions (RV 759 /XX. GP zu BGBl. 1997/I/100). This provision thus cannot serve as a legal basis to refuse the transfer of these mails to the addressee.
e) How is the legal situation affected by the fact that that the e-mail has been sent from abroad? According to Section 26 Media Law notices, recommendations and other reports that are published against remuneration must be marked as "Advertising", "Insert against remuneration" or "Announcement" except in cases that there is no doubt whatsoever by the choice of its form or layout that the message was published against remuneration. For foreign media there is no such obligation according to Austrian law (Section 50 Media Law).
f) Are users allowed to send flame mails to the spamming company? Section 75 (1) TKG (see above under 1.b) might constitute a legal basis to prevent the sending of flame mails.
2. The use of hyperlinks Hyperlinks are a very effective instrument for online marketing. Commercial homepages can integrate links to competitors and their internet location. Links can enrich the informational value of a homepage. By referring to the content of other homepages information on competing products can be compared to the own products which leads to a kind of virtual comparative advertisement. In addition, the value of a homepage is increasing due to the various links to other web-spaces. However, linking is not always welcome among competitors and therefore causes legal problems.
a) Is it lawful to set hyperlinks to web-sites of competitors? When creating web-sites "links" are used as a form of table of contents. If a user clicks upon a word or an icon another page opens whereby the user normally leaves the referring page . The homepage where the user has been linked to may be on a completely different server of a completely different person or institution. Via links it is possible to visit the offers of other providers on the internet even without their knowledge.
The legality of the setting of hyperlinks must be examined under aspects of copyright law and (unfair) competition law.