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Games Law in Germany: 2022 RECAP

After having had an excellent start into the new year, we would like to look back on the year 2022 from a German "games law" perspective and go into a "speed run" through –what we personally think were most important innovations and rulings on games and e-sports. We want to focus on the "main quests" of 2022 and venture a detour to the places where one or the other legal "Easter Egg" was hidden.

Privacy and Data Protection

The Federal Court of Justice (FCJ) (BGH I ZR 186/17) again had to deal with the right of consumer protection associations to institute legal proceedings in the event of GDPR violations, and once again referred the case to the European Court of Justice. The proceedings between the umbrella organisation of consumer associations (vzbv) and Facebook (Meta) regarding an earlier design of the app centre for instant games had last been suspended by the FCJ in 2020 and referred to the ECJ to clarify the question of the legal standing of associations. Subsequently, the ECJ had already affirmed this on the merits.

E-Sports

The non-profit status of e-sports promised in the coalition agreement between the governing parties was not implemented in 2022. E-sport has not been recognized as a sport in Germany to date. Granting such a status would be possible, for instance, by adding it to the catalogue of non-profit purposes (Section 52 German Fiscal Code). The Federal Government stated upon request that the content and timetable for the implementation of the non-profit status of e-sports had not yet been determined.

More encouraging news on e-sports came from the EU. In its resolution 2022/2027, the European Parliament emphasized the importance and positive impact of e-sports and video games. The resolution states, among other things, that national, regional and global e-sports tournaments could be seen as a means of promoting cultural exchange and Europe's culture and values, and that video games and e-sports can also offer significant benefits to many players in terms of mental health and enable spreading positive values. The European Parliament nevertheless considers that e-sports and traditional sports are different "sectors", which is related to the position of power of the publisher, who holds an exclusive and unrestricted right to use its games. However, sports and e-sports complemented each other, learned from each other, and promoted comparable positive values. The European Parliament's demands to the Commission include introducing an e-sports visa for the Schengen area and adopting guidelines regarding the status of professional e-sports players. We eagerly await to see how the European Commission implements this request.

The Regional Court of Kiel (17 O 24/20) had to deal with a case in which an e-sports athlete successfully sued another e-sports athlete for injunctive relief and damages for pain and suffering due to defamatory statements broadcast via the streaming platform Twitch. The Regional Court of Kiel found that the plaintiff's general right to privacy had been unlawfully violated by the insults in dispute. This does not change even if a "rough tone" prevails in e-sports - as claimed by the defendant.

Protection of Minors

The protection of minors in games was also a subject of intense discussion in 2022. On the one hand, this covered the content of the games themselves, such as the depiction of violent actions in the post-apocalyptic survival game "Dying Light 2," and on the other hand, and above all, usage risks in digital games. The Norwegian consumer organization Forbrukerrådet published an extensive report on the supposed "enfant terrible" among the usage risks - the Lootbox - which was supported by other consumer organizations in Europe. This report was picked up, among others, by ZDF Magazin Royale, a journalistic-satirical TV program, and thus stimulated a new the discussion about the Lootbox issue, which had meanwhile faded away in Germany.

Usage risks in computer games and how to deal with them will continue to keep us busy in 2023, as the USK (Entertainment Software Self-Regulation Body) has revised itscriteria for reviewing, rating, and labelling digital games based on the 2021 revision of the German Protection of Minors Act (Jugendschutzgesetz). Now, interaction risks (usage risks) must be taken into account, and the games must make explicit reference to these by means of so-called descriptors. At present, there are the following four categories of interaction risks (usage risks):

  • In-Game purchases
  • Chats
  • In-game purchases + random objects (e.g., loot boxes)
  • Location sharing

That the topic is red-hot is also proven by the record fine of 520 million US dollars imposed in December in the USA against the company Epic Games, among other things, because of communication options available in the game Fortnite (Fortnite has since been adapted in this respect). It remains to be seen whether similar proceedings will occupy European or even German courts in 2023.

What else was up?

The Higher Administrative Court of North Rhine-Westphalia (19 B 961/21) had to deal with the legality of the indexing of a computer game because it is harmful to minors. Referring to the Bushido decision of the Cologne Administrative Court, the Higher Administrative Court clarified that the Federal Review Board for Media Harmful to Minors can make up for the hearing of the author pursuant to Section 21 (7) of the German Protection of Minors Act during court proceedings.

Platform Regulation

Additional tasks which will continue to keep us busy also in 2023, arose from the coming into force of the Digital Markets Act and, in particular, the Digital Services Act. The latter subjects providers of intermediary services (mere conduit, caching and hosting services as well as operators of online platforms and search engines) to a comprehensive catalogue of duties.

The Digital Services Act will put an end to the patchwork of regulations currently in force for providers of intermediary services providers in the European Union. In doing so, the law follows the seemingly simple principle that what is illegal offline should also be illegal online. Less simple, and thus worthy of careful consideration, is the sometimes extensive, graduated catalog of obligations that goes hand in hand with the law.

Providers of online services, such as multiplayer games, must now check in the first place whether and which of their services fall under one of the above categories to determine the resulting new obligations. Non-compliance with the regulations can be sanctioned with heavy fines of up to six percent of consolidated annual worldwide turnover in future.

Copyright

The German Federal Court of Justice confirmed its previous line on network blocking for copyright infringements in a ruling in October (BGH I ZR 111/21). According to this ruling, the blocking of websites by access providers can only be demanded if the rights holder has tried all other reasonable means to no avail. In the case decided, it was still possible to bring an action for information against the Swedish host provider to identify the infringer.

The Cologne Regional Court (14 O 38/19) dealt with contributory liability for copyright infringement of automation software (also known as: bots) for a well-known smartphone and tablet game in early 2022. The question arose as to whether a managing director could be held liable for the infringing acts (in addition to the defendant company). The Cologne Regional Court assumed this, applying the general principles of complicity pursuant to Section 25 (2) German Criminal Code, because the latter had a significant share and influence on the organizational, technical and entrepreneurial framework of the copyright infringement.

Bots were also (indirectly) an issue before the German Federal Constitutional Court in 2022 (BVerfG - 1 BvR 1021/17). There, a bot creator defended himself against the enforcement of an injunction limited to the Federal Republic of Germany. The publisher, on the other hand, took the view that the title also required the debtor to do everything possible in Germany to prevent future copyright infringements by third parties - including third parties abroad. This was also the view of the Dresden Higher Regional Court in its order for payment of an administrative fine to the detriment of the bot creator. However, the Federal Constitutional Court considered the order to be arbitrary and thus a violation of the bot creator's fundamental right under Article 3 (1) of the German Constitution. As a consequence of the principle of territoriality applicable in copyright law, the infringing act in question must hence have been committed at least in part within Germany. The cease-and-desist order from the main proceedings (BGH I ZR 25/15) must not be understood as a general obligation to act.

Consumer Protection Law

Challenges for companies arose at national and EU level as a result of new requirements in consumer protection law. The implementation of the Directive on certain aspects of contracts relating to the provision of digital content and services (Directive 2019/770/EU - Digital Content and Service Directive) added a new section to the German Civil Code (BGB) in Sections 327 et seq. German Civil Code, which regulates rights and obligations in contracts for digital content and services between entrepreneurs and consumers. As Recital 19 of the Directive also makes clear: Very relevant for "digital games".

New and surprising for some companies was the fact that consumer protection provisions from distance selling law now also apply when a consumer "pays with its data" rather than with money. This now results, among other things, in comprehensive pre-contractual information obligations, the requirement of a revocation instruction and the necessity of a contract confirmation.

Companies should urgently tackle this and other homework (such as reviewing user terms and conditions) in 2022, because the implementation of the "New Deal for Consumers" means that companies will face severe fines of up to 4% of global annual turnover in the future for violations of European consumer protection law.

On a national level, Section 312k of the German Civil Code, new version, has been in force since July 1, 2022, which stipulates that a "cancellation button" must be made available to consumers in electronic business transactions for continuing obligations against payment (entgeltliche Dauerschuldverhältnisse). Consumer groups and associations didnot hesitate for long to issue the first warnings which have led to improvements by the companies according to the consumer watchdogs. The cancellation button is mandatory for the vast majority of continuing obligations that can be concluded online, regardless of whether they were concluded before July 1, 2022.

What else was up?

The Karlsruhe Regional Court (3 O 108/21) dealt, among other things, with the premature expiration of the right of cancellation when purchasing game currency in an in-game store. In deviation from the standard 14-day cancellation period, the statutory consumer right of cancellation pursuant to Section 356 (5) of the German Civil Code may expire prematurely and end earlier under certain circumstances in the case of contracts for the supply of digital content. The consumer must confirm that the right of cancellation expires before the 14 days have expired in this case and that the entrepreneur begins to provide the digital content before the end of the cancellation period in the case of contracts against payment. As the Karlsruhe Regional Court states in its ruling, however, this does not require any prior information about the conditions, the procedure and the exercise of the right of cancellation. A checkbox with the addition "I agree to the execution of the contract [...] before the expiry of the cancellation period and know that my right of cancellation thereby expires." makes it sufficiently clear that a right of cancellation exists and is extinguished. Following the decision of the Karlsruhe Regional Court, a "waiver" of the right of cancellation is also legally permissible before the final purchase confirmation.

Conclusion

We note that in fact, there was a lot of work to be done in 2022 as well. One or the other struggle in copyright law had to be fought out. The right tools had to be prepared for the compliance jungle, which presents new challenges from year to year. Now it is time to focus on the legislative quests that the year 2023 brings.

Daniel Trunk

TAGS

Games eSports Datenschutz

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Daniel Trunk T   +49 69 756095-582 E   Daniel.Trunk@advant-beiten.com