EFFECTEN SPIEGEL AG v. GERMANY

FIFTH SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 38059/07
by EFFECTEN SPIEGEL AG
against Germany

The European Court of Human Rights (Fifth Section), sitting on 4 May 2010 as a Chamber composed of:

Peer Lorenzen, President,
Renate Jaeger,
Karel Jungwiert,
Rait Maruste,
Mark Villiger,
Isabelle Berro-Lefèvre,
Zdravka Kalaydjieva, judges,
and Claudia Westerdiek, Section Registrar,

Having regard to the above application lodged on 24 August 2007,

Having deliberated, decides as follows:

THE FACTS

The applicant, Effecten Spiegel AG, is a corporation (Aktiengesellschaft) registered in Germany. It was represented before the Court by Mr D. Herrmann, a lawyer practising in Karlsruhe.

The facts of the case, as submitted by the applicant company, may be summarised as follows.

1. The background to the case

The applicant company is the publisher of Effecten-Spiegel, a weekly journal aimed at the investor community. By letter of 5 November 2001 the editor received a press statement by Mr D., a shareholder and former staff member of Audi, a subsidiary of one of the leading German automobile groups, the Volkswagen group (VW). In the statement Mr D. raised several allegations against Mr P., a well-known business leader and manager, chairman of the board (Vorstandsvorsitzender) of Audi until 1992 and chairman of the board of VW from 1993 to 2002. Both companies were listed on the stock exchange and the Federal State of Lower Saxony (Land Niedersachsen) held approximately one-fifth of the shares.

Prior to publication, by letter of 6 November 2001 the applicant company transmitted Mr D.'s press statement to the board of Audi and asked for a written comment (schriftliche Stellungnahme). The next day the applicant company informed the board of Audi that for editorial reasons any comments should be sent by 12 November 2001.

In its issue of 15 November 2001 Effecten-Spiegel published an article on the basis of Mr D.'s press statement. The article gave an account of parts of Mr D.'s press statement and his allegations against Mr P. In the last paragraph of the article the author commented on these statements, holding that “the whole story stinks to high heaven” (“Das Ganze stinkt zum Himmel”):

“The whole story stinks to high heaven! Particularly if it is borne in mind that the Federal State of Lower Saxony indirectly owns 20% of Audi and that therefore particular sensitivity could be expected. Effecten-Spiegel has in the past denounced the fact that big business was ransacking the national economy. If big business will not even invest in the East in a case such as this one, when will it? And the reproach of betraying one's own country in this context seems understandable. But above all, I wonder: VW is trying to squeeze out private dealers and to set up its own branches everywhere, and it cannot equip the east European countries with its own branches, but acts by proxy of a company owned by P., Porsche Holding?!!! That is totally implausible!”

The article revealed the source of its contents and Mr D. was presented as an insider source as he had been involved, in 1971, as the main representative of one sector of the board of Audi, in the conclusion of contracts with VW.

2. The proceedings before the domestic courts

(a) The decision of the Hamburg Regional Court

On 10 November 2002 the Hamburg Regional Court, upon an application by Mr P. for an injunction (Unterlassungsklage), ordered the applicant company to refrain from disseminating certain parts of the article, namely from:

“1. disseminating:

'It is known that P. holds shares in Porsche and in 1992, according to D., he apparently grabbed for free (offenbar kostenlos unter den Nagel gerissen) the exclusive distribution rights through Porsche Holding for Audi, Seat, Skoda and VW in Hungary, Slovakia and Romania.'

2. giving the impression that in the context of his activities for VW AG the plaintiff [Mr P.] was involved in decision-making concerning royalty payments in favour of Porsche Holding or other companies in which the plaintiff holds shares, by reporting:

'Moreover [in conjunction with D.'s allegations against the plaintiff], D. addresses the question of royalty payments by Audi AG to Porsche AG or other companies in which P. holds shares.'

3. disseminating that the background to the decision against Magdeburg (namely in favour of building an engine plant in Györ in Hungary) was, in D.'s opinion, that 'Mr P. would like to have a factory as the exclusive distributor, exactly as for the all‑terrain vehicles in Slovakia'.”

The Regional Court held that the dissemination of the above statements violated Mr P.'s personality rights. The first statement (under 1.) consisted of a factual statement because to say that somebody had “grabbed” something implied that this person had acted with the aim of getting something. The statement was also disparaging as it implied that Mr P. had abused his leading position to his own advantage. Hence, the Regional Court found that the burden of proof was with the applicant company, which had not produced any evidence to that effect and had not even contested Mr P.'s submission that he had not been involved in the decision about the exclusive distribution rights. Against this background the statement had to be regarded as untrue and thus was not protected by freedom of speech. Moreover, the court held that there had not been a legitimate interest in the publication of the statement. It was true that even the publication of untrue factual statements could be justified. However, this was only the case if the person disseminating the information had sufficiently tried to verify the facts prior to publication and if any remaining doubts as to the truth of the facts had been made sufficiently clear. In the case at hand, the applicant company had not even come close to having exhausted all possibilities of establishing the facts, as it had not tried to obtain a statement either from Mr P. himself or from the board of VW, that is, from those persons against whom the allegations had been raised. Furthermore, the article was a long way from balanced coverage that also indicated doubts as to the truth of the statements made by Mr D.

As to the second statement (under 2.), the Regional Court held that it necessarily gave the impression claimed. This was the case in particular because the statement that Mr D. also “addresses the question of royalty payments” was made in the direct context of the statement that Mr D. had raised serious allegations against Mr P. Any other understanding would render the statement meaningless and empty. The statement, hence, consisted of a factual statement (through the creation of an impression) and had to be regarded as untrue because the applicant company had not produced any evidence. For the same reasons as for the first statement, there had also not been a legitimate interest in the publication of the expression.

As to the third statement (under 3.), the Regional Court likewise held that it consisted of a factual statement as it alleged a certain motivation on the part of Mr P., in other words an “internal fact”. Such statements had to be regarded at least as statements of fact if they were connected with certain external events by which these internal circumstances allegedly became perceptible to others. The court found that this was the case as the decision to build an engine plant in Hungary was traced back to an alleged internal motivation on the part of Mr P. as being the real reason for that decision. The existence of this alleged causal connection between the motivation of Mr P. and the decision in question was susceptible to proof – be it by circumstantial evidence or by interviewing Mr P. The statement, moreover, had not been changed into a value judgment by formally adding “in Mr D.'s opinion”. The decisive factor was not the formal terms in which a statement was couched but the way it was understood by the average reader. Otherwise the publisher of a factual statement could easily escape the rules governing publication of statements of fact by adding “according to” or “in the opinion of”. From the perspective of an average reader, the basic purpose of the statement at stake was not to convey information about the personality and the opinions of Mr D. – as might be the case, for example, in a portrait of Mr D. – but about events within the VW group. Finally, for the same reasons as for the first and the second statement, there had neither been a legitimate interest in the publication of this statement.

(b) The decision of the Hamburg Court of Appeal

On 18 February 2003 the Hamburg Court of Appeal dismissed an appeal by the applicant company against the judgment and refused leave to appeal on points of law. It confirmed the reasoning adopted by the Regional Court. As to the appellate submissions, the Court of Appeal added that, concerning the first statement, the expression “grabbed for free” could only be understood in the sense that Mr P. had actively influenced the decision about the awarding of the exclusive distribution rights. It pointed out that, contrary to the applicant company's contention, the simple fact of Mr P. being the chairman of Audi was far from being sufficient to influence that decision in the manner claimed. It also expressly confirmed the Regional Court's finding that the applicant company should have interviewed Mr P. or at least the board of VW. Moreover, the article was not even close to mentioning sufficient facts supporting a reasonable suspicion. With regard to the second statement, the Court of Appeal confirmed that it necessarily suggested the impression claimed and re-emphasised that the statement directly followed the information that Mr D. had raised “serious allegations” against Mr P. and that the article ended with the conclusion that “the whole story stinks to high heaven”. Such wording was not of a kind to leave it up to readers to draw their own conclusions. As to the third statement and the argument – also mentioned in the article – that prior to the decision in favour of Györ, Mr P. had given incorrect information about the difference in salaries between Hungary and Germany, the Court of Appeal held that it did not follow from this that the real reason for the decision was the motivation of Mr P. as alleged in the article.

(c) The decision of the Federal Court of Justice

On 23 September 2003 the Federal Court of Justice rejected a complaint by the applicant company against the refusal of leave to appeal on points of law (Nichtzulassungsbeschwerde), without giving further reasons.

(d) The decision of the Federal Constitutional Court

On 21 March 2007 the Federal Constitutional Court refused to accept for adjudication a constitutional complaint by the applicant company. It first held that statements of fact – whether a person's own statements or statements of others incorporated in the person's own statement – fell within the scope of protection of the freedom of expression as guaranteed in the Basic Law (Grundgesetz) as long as their untruthfulness was not established. However, this protection was subject, inter alia, to the limitations laid down by the provisions of general laws, including the protection of the personal rights of others. The interpretation and application of these provisions, the establishment of the facts and the balancing of the different interests concerned were the task of the civil courts, which had to take into account the relevance and the impact of fundamental rights.

With regard to the general principles established in its case-law the Federal Constitutional Court underlined that it was of crucial importance whether an expression contained factual elements the truth of which could be verified. If an expression inseparably contained both factual and evaluating elements, it had to be regarded as a value judgment if it was dominated by the evaluating elements. However, the truth or untruth of the factual elements had to be taken into account when balancing the different interests. If the publication of statements of fact, the truth of which was uncertain, interfered with the personal rights of others, there were duties of care (Sorgfaltspflichten) to fulfil. The more intense the interference, the more intense these duties became. One aspect was the question whether the person making the statement had adequately verified the facts and correctly conveyed the state of his knowledge in this regard. The courts had to take into account that these duties of care were an expression of the State's positive obligation to protect the personal rights of others. On the other hand, they also had to take into account the public interest in the information concerned, and the requirements in question should not have a constricting effect on readiness to make use of the freedom of expression.

Against the background of these principles, the Federal Constitutional Court did not find a violation of constitutional law. It held that the expressions at stake all contained factual elements, the truth of which had not been established. The Federal Constitutional Court also found that at the time of their publication there had been no legitimate interest in the dissemination of the statements at stake. It held that it might have been excessive for the courts to have required the applicant company to also ask the board of VW and Mr P. for a written comment. However, this had been only one additional aspect amongst others which in themselves formed a sufficient basis to justify the decisions. In particular, the courts had taken into account that the statements in the article were based on one single private source only and that the dissemination of such information was acceptable only if there was a minimum of evidence in favour of its veracity. Lastly, the Federal Constitutional Court also found that the court decisions were not in contradiction with the case-law of the European Court of Human Rights. Referring to different judgments of the latter, it pointed out that there was no breach of Article 10 of the Convention if the domestic courts, when balancing the different interests involved, attached weight to the question whether the person making the statement had conducted his own investigations as to the veracity of the information and whether any remaining doubts had been made sufficiently clear.

COMPLAINT

The applicant company complained under Article 10 § 1 of the Convention that the domestic courts' decisions ordering it to refrain from publishing certain statements violated the freedom of the press.

THE LAW

The applicant company alleged that by ordering it to refrain from disseminating the statements at stake the domestic courts' decisions had violated Article 10 of the Convention, the relevant part of which reads:

“1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority ...

2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, ... for the protection of the reputation or rights of others ...”

The applicant company emphasised the important role of the press in a democratic society and underlined that the obligation of journalists to verify the truth of statements of fact prior to publication should not be overstretched. The so-called “bona fide reporting” was also considered indispensable by the Court, which had held not only that the press had the task of imparting such information and ideas, but also that the public had a right to receive them. The applicant company stressed that the article mainly contained value judgments and that the editor's comment in the last paragraph did not change the nature of the article as “press coverage based on suspicion” (“Verdachtsberichterstattung”). Mr D.'s statements, even if drastic and provocative, were a legitimate exercise of his right to freedom of expression and a press organ a fortiori had to be allowed to publish them. It had also sufficiently verified their truth and therefore acted in consistency with its duties and responsibilities under the Convention.

The Court notes at the outset that the interference was prescribed by law, namely section 823 § 1 and section 1004 § 1 of the German Civil Code (Bürgerliches Gesetzbuch) in conjunction with Articles 1 and 2 of the Basic Law, and that it pursued the legitimate aim of protecting the reputation or rights of others.

The only issue is whether the measure was necessary in a democratic society, which the applicant company disputed.

The Court notes that the present case raises specific issues of press freedom similar to those dealt with in previous cases, namely the duties and responsibilities of the press when publishing allegations against third parties. As regards the general principles relating to freedom of the press in that context, the Court refers to the summary of its established case-law in the cases of Bergens Tidende and Others v. Norway (no. 26132/95, §§ 48‑50, ECHR 2000‑IV), Times Newspapers Ltd v. the United Kingdom (nos. 1 and 2) (nos. 3002/03 and 23676/03, §§ 40-43, ECHR 2009‑...) and Europapress Holding d.o.o. v. Croatia (no. 25333/06, §§ 54-55 and § 58, 22 October 2009). In its examination of the present case, the Court will have regard to the manner in which it applied these general principles.

The impugned article, and in particular the passages at stake, reported about allegations by Mr D., a former high-ranking staff member, against Mr P., a well-known business leader and manager, the former chairman of Audi and subsequently chairman of the VW board. The allegations concerned the business conduct of the latter, in particular the alleged commingling of personal and professional interests to the company's detriment. Both companies were listed on the stock exchange and the information might therefore have been of interest to numerous investors. Moreover, Lower Saxony was one of the companies' main shareholders. Hence, the Court considers that the subject matter was one of legitimate public concern. Careful scrutiny of the proportionality of the domestic courts' decisions is therefore called for on the part of the Court.

As regards the domestic courts' assessment of the question whether the statements at stake had to be classified as statements of fact or value judgments (see Pedersen and Baadsgaard v. Denmark [GC], no. 49017/99, § 76, ECHR 2004‑XI), the Court notes that the statements consisted in the main of the allegation that Mr P. had misused his position to gain certain personal advantages, and thus of statements of fact susceptible of proof. In so far as the statements at stake also contained elements of value judgments (for instance, the choice of words such as “grabbed”), those were based upon the above-mentioned allegations of facts. In this connection the Court reiterates that even where a statement amounts to a value judgment, there must exist a sufficient factual basis to support it, failing which it will be excessive (ibidem). It has further to be underlined that the applicant company never endeavoured to provide any justification for the allegations, and their veracity has never been proved. In assessing the legitimacy of statements of fact it is not, in principle, incompatible with Article 10 to place on a defendant in injunction proceedings the onus of proving to the civil standard the truth of defamatory statements (see McVicar v. the United Kingdom, no. 46311/99, § 87, ECHR 2002‑III, and, as to libel proceedings, Alithia Publishing Company Ltd and Constantinides v. Cyprus, no. 17550/03, § 68, 22 May 2008). It was for this reason that the domestic courts at all levels of jurisdiction found that the statements at stake had to be regarded as untrue. With regard to the applicant company's complaint that the statements were true as Porsche had gained the distribution rights for free and as Mr P. had supported the decision against Magdeburg, the Court points out that the question is not whether but why these decisions were taken, namely whether Mr P. illegitimately influenced the decision-making. Hence, there are no elements that could lead the Court to depart from the findings of the domestic courts to the effect that it had not been demonstrated that the statements at stake were true. Their publication thus amounted to the dissemination of incorrect information.

The Court must therefore examine whether the research conducted by the applicant company before the publication of the untrue statement of fact was in good faith and complied with the ordinary journalistic obligation to properly verify factual allegations (see, for instance, Bergens Tidende and Others, cited above, § 53). The more serious the allegation is, the more solid the factual basis should be (see Pedersen and Baadsgaard, cited above, § 78 in fine, and Europapress Holding d.o.o., cited above, § 66). Otherwise, the Court must examine whether there were any special grounds in the present case for dispensing the applicant company from its ordinary obligation to verify the statements at stake. In previous cases, when the Court has been called upon to decide whether to exempt newspapers from their ordinary obligation to verify factual statements that are defamatory of private individuals, it has taken into account various factors, particularly the nature and degree of the defamation and the extent to which the newspaper could have reasonably regarded its sources as reliable with regard to the allegations. The latter issue must be determined in the light of the situation as it presented itself at the material time (see Bladet Tromsø and Stensaas v. Norway [GC], no. 21980/93, § 66, ECHR 1999‑III). These factors, in turn, require consideration of other elements such as the authority of the source, whether the newspaper had conducted a reasonable amount of research before publication, whether the newspaper presented the story in a reasonably balanced manner and whether the newspaper gave the persons defamed the opportunity to defend themselves. Hence, the nature of such an exemption from the ordinary requirement of verification of defamatory statements of fact is such that, in order to apply it in a manner consistent with the case-law of this Court, the domestic courts have to take into account the particular circumstances of the case under consideration (see The Wall Street Journal Europe SPRL and Others v. the United Kingdom (dec.), no. 28577/05, 10 February 2009, with further references).

Prior to the publication, that is, six days before the editorial deadline, the applicant company unsuccessfully asked the board of Audi for a written comment. However, the efforts of the applicant company to verify the statements by Mr D. remained limited to that attempt. The applicant company did not obtain the opinion of any other person on the allegations, nor does the article contain any factual information – apart from that supplied by Mr D. – to corroborate the latter's allegations against Mr P. Against this background, the Court finds that the publication of the statements at stake mainly amounted to an uncritical reproduction of Mr D.'s allegations. The Court cannot but agree with the domestic courts in their finding that the applicant company did not sufficiently verify the information prior to publication.

As to the question whether there were grounds for dispensing the applicant company from its ordinary obligation to verify the statements at stake the Court first notes that the allegations raised in the article were of a serious nature. As regards the source of the information and its authority, the Court underlines that the applicant company relied on merely one single source, namely Mr D.'s press statement. On the one hand, that source's authority was reinforced by the fact that Mr D. was a former high-ranking employee of Audi and thus an insider. On the other hand, as a former employee Mr D. cannot necessarily be automatically regarded as being neutral and objective. Therefore, it was at least doubtful at the material time whether Mr D. could be regarded as a reliable source of information to the extent that no further verification was necessary. As the applicant company nevertheless limited its efforts to contacting the board of Audi, the Court finds that the way in which the article and the allegations at stake were presented is of crucial importance in the present case.

The applicant company emphasised that, except for the last paragraph, the article had only reported the statements of a third person and that this had been made clear throughout the whole article by references to the source. The Court finds that the mere characterisation of statements as being statements by third parties does not, in principle, dispense the publisher from the “duties and responsibilities” inherent in the exercise of freedom of expression, in particular from the obligation to verify the truth of statements of fact (see Bladet Tromsø and Stensaas, cited above, § 66, and, mutatis mutandis, Standard Verlags GmbH v. Austria (no. 2), no. 21277/05, § 42, 4 June 2009). Nevertheless, the article did not inform readers of any remaining doubts as to the truth of the allegations, nor did the author present substantial arguments of his own and facts to corroborate those allegations. Only in the last paragraph did the author produce a single argument to corroborate one of the allegations, namely by explaining why it was implausible that VW had to act by proxy in east European countries. However, the conclusion that “the whole story stinks to high heaven” does not leave it up to readers to draw their own conclusions. On the contrary, it gives the impression that the author had made the allegations his own. Therefore, the Court cannot but agree with the domestic courts' finding that the information in the article was not presented in a reasonably balanced manner, and sees no reason why the applicant company should have been dispensed from its duty to verify properly the information published.

The Court has examined the way in which the domestic courts dealt with the case, and in particular whether they applied standards which were in conformity with the principles embodied in Article 10 of the Convention (see Europapress Holding d.o.o., cited above, § 70). The decisions reveal that the domestic courts fully recognised that the present case involved a conflict between the right to impart information and protection of the reputation or rights of others, a conflict they resolved by weighing up the relevant considerations.

Finally, with regard to the question whether the measures taken against the applicant at domestic level were proportionate to the legitimate aim pursued, the Court points out that the applicant company did not face criminal proceedings, nor was it ordered to pay damages. In fact, the domestic courts ordered the applicant company to refrain from disseminating certain statements published in the article, a measure which has to be regarded as the least severe one available to persons whose reputation has been tarnished by published information.

In the light of the foregoing, the Court considers that the reasons given by the domestic courts in support of their decisions were “relevant and sufficient” within the meaning of its case-law and that the decisions ordering the applicant company to refrain from disseminating the statements at stake were not disproportionate to the legitimate aim pursued. Therefore, the interference with the applicant company's freedom of expression was “necessary in a democratic society”. The application discloses no appearance of violation of Article 10 of the Convention. It follows that the application must be rejected as being manifestly ill-founded pursuant to Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court by a majority

Declares the application inadmissible.

              Claudia WesterdiekPeer Lorenzen
RegistrarPresident

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