Guest contributor, attorney Martin Steiger

On August 1, 2012, new obligations for electronic commerce, contained in the German Civil Code (BGB), came into force. Those obligations contain, among other things, the ‘button solution’ – the reason the new law is often called the ‘button law’.

The button solution provides that an explicit confirmation of payment is required for an e-commerce contract with a consumer to be valid. With such a confirmation, done through an order button, consumers are committed to paying for their order. With that, consumers should get more protection from subscription traps and other costly deceptions on the internet.

Button solution in Germany
The new rules make it obligatory for e-commerce providers to clearly provide and highlight information related to an order, such as the total price, to the consumer. This information must be supplied before the order is placed by the recipient of the service. The order form must be designed in such a way that the prospective buyer clearly confirms that they commit to pay for an order. If an order is placed by clicking a button, this button must be labeled with the words «zahlungspflichtig bestellen» (order, with obligation to pay). Other terms may be used as long as they have the same meaning. Consumers must be clearly and unambiguously informed about the cost of their order.

In the official justification for the button solution «kaufen» (buy), «kostenpflichtig bestellen» (pay order) and «zahlungspflichtigen Vertrag schliessen» (accept contract with obligation to pay) are deemed as having the same meaning. For auction platforms, «Gebot abgeben» (make a bid) and «Gebot bestätigen» (confirm bid) are deemed to be of equal meaning.

However, words such as «abschliessen» (complete), «anmelden» (register), «bestellen» (order), «Bestellung abgeben» (place order) and «weiter» (next) are deemed not sufficiently unambiguous.

The writing on the button must be easily readable on a regular screen, a readable font size is required and a low contrast design is not permitted. Graphical elements may not distract from the text. It is not only buttons in the strict sense of the term are deemed to be buttons; the button solution applies to other elements too, as long as they may be used for the placing of orders – for example, web links, checkboxes, and selection lists. The button solution applies to any type of e-commerce that targets consumers, and applies not only to websites, but also to apps.

German 'button solution' affects swiss e-commerce providers

A ‘button solution’ for Switzerland?
So far, there is no button solution in Switzerland and the new German rules don’t apply to e-commerce providers in Switzerland because it is a foreign law. But the law does apply to e-commerce providers in Switzerland that target German consumers.

In the future, Swiss online shops that target German consumers must adhere to the button solution, as well as to earlier rules such as the obligation to provide contact data, the right of revocation, and information obligations. German law or a German place of jurisdiction cannot be excluded in the general terms and conditions (GTC) for consumers.

The button solution is problematic for online shops in Switzerland that do not deliberately target German consumers. Whether such a shop should align with the new rules has to be individually weighed. There are reasons for an alignment, such as the ability to deliver to Germany, euro pricing, and online advertising in Germany. Reasons against adjusting to German laws include offers that cannot be utilized in Germany, or a refusal to engage in e-commerce transactions with German consumers. The latter requires a note to the effect that no deliveries to Germany may be undertaken.

Legal consequences and conclusion from a Swiss point of view
Swiss e-commerce providers that target or are likely to target German consumers should implement the button solution immediately. The highest legal protection is offered by the button label «zahlungspflichtig bestellen» (order, with obligation to pay). Implementation is comparably easy and protects from unintended legal consequences. E-commerce providers that ignore the button solution risk a cease-and-desist letter and a penalty payment, and contracts with customers placing orders will not be legally valid.

A consultation with a lawyer is recommended in case of doubt.

German ‘button solution’ affects swiss e-commerce providers

Martin Steiger

Martin Steiger is an independent lawyer. It focuses on the rights in the digital space with a focus on IT, intellectual property and media law. In his spare time Martin engaged inter alia in the Digital Society (Switzerland) and is on the board of TEDxZurich.