MARKT INTERN VERLAG GMBH AND BEERMANN v. GERMANY



Application No. 10572/83

 

MARKT INTERN Verlag GmbH

 

and Klaus BEERMANN

 

 

against

 

 

the FEDERAL REPUBLIC OF GERMANY

 

 

REPORT OF THE COMMISSION

 

(adopted on 18 December 1987)

 

TABLE OF CONTENTS

 

 

I.      INTRODUCTION

        (paras. 1-20) .........................................    1

 

        A.      The application

                (paras. 2-5) ..................................    1

 

        B.      The proceedings

                (paras. 6-15) .................................    1

 

        C.      The present Report

                (paras. 16-20) ................................    3

 

II.     ESTABLISHMENT OF THE FACTS

        (paras. 21-78) ........................................    4

 

        A.      The particular circumstances of the case

                (paras. 21-57) ................................    4

 

        B.      Relevant domestic law and practice

                (paras. 58-78) ................................   13

 

III.    SUBMISSIONS OF THE PARTIES

        (paras. 79-186) .......................................   17

 

        A.      The applicants

                (paras. 79-128) ...............................   17

 

        B.      The Government

                (paras. 129-186) ..............................   23

 

IV.     OPINION OF THE COMMISSION

        (paras. 187-253) ......................................   32

 

        A.      Point at issue

                (para. 187) ...................................   32

 

        B.      Applicability of Article 10

                (paras. 188-204) ..............................   32

 

        C.      The scope of interference with the

                applicants' freedom of expression

                (paras. 205-206) ..............................   34

 

        D.      The justification of the interference

                with the applicants' freedom of expression

                under Article 10 para. 2

                (paras. 207-252) ..............................   35

 

        E.      Conclusion

                (para. 253) ...................................   42

 

APPENDIX I      :  HISTORY OF THE PROCEEDINGS .................   43

 

APPENDIX II     :  DECISION ON THE ADMISSIBILITY ..............   45

 

I.    INTRODUCTION

 

 

 

1.      The following is an outline of the case as submitted to the

European Commission of Human Rights, and of the procedure before the

Commission.

 

 

A.      The application

 

 

2.      The first applicant, MARKT INTERN Verlag GmbH, is a firm of

publishers organised as a limited liability company under German law,

which is established in Düsseldorf.  The second applicant, Mr.  Klaus

BEERMANN, a German citizen born in 1939, is the editor-in-chief of the

information bulletins published by the first applicant.  Both

applicants were represented by Prof.  Dr.  Christian Tomuschat of Bonn.

 

3.      The application is directed against the Federal Republic of

Germany whose Government were represented by their Agent, Frau

Ministerialdirigentin Irene Maier of the Federal Ministry of Justice.

 

4.      The case concerns the application of unfair competition law to

statements published in one of the first applicant's bulletins on the

commercial behaviour of a certain firm.  The publication was

restricted on the ground that it unjustifiedly interfered with that

firm's competition with others.  The Federal Court of Justice

considered it to be in breach of honest practices because, in its

view, the disclosure of the relevant facts was not warranted by the

circumstances.  The Federal Constitutional Court confirmed this

decision, holding that the freedom of expression did not prevail over

other legally protected interests where a case concerned the promotion

of economic interests in the context of competition.

 

5.      The applicants allege that the restriction of the above

publication amounted to an unjustified interference with their right

to freedom of expression, as guaranteed by Article 10 of the

Convention.

 

 

B.      The proceedings

 

 

6.      The application was introduced on 11 July 1983 and registered

on 15 September 1983.

 

7.      On 5 July 1984 the Commission decided, in accordance with Rule

42 para. 2 (b) of its Rules of Procedure, to give notice of the

application to the respondent Governmant and to invite them to

present before 26 October 1984 their observations in writing on the

admissibility and merits of the application.

 

8.      On 19 November 1984 the Commission's President granted a

request by the Government to extend the above time-limit until

25 February 1985.  On 9 March 1985 the Commission refused to grant a

further extension of the time-limit until 1 April 1985, as requested

by the Government.

 

9.      The Government submitted their observations on 27 March 1985

and the applicants submitted observations in reply on 30 April 1985.

 

10.     On 17 May 1985 the Commission decided to hold an oral hearing

on the admissibility and merits of the application.

 

11.     The hearing took place on 21 January 1986.  The parties were

represented as follows:

 

        - the applicants

 

          by their counsel, Professor Dr.  Christian TOMUSCHAT and

          Assessor Rolf KOEHN, legal adviser to the applicant firm;

 

        - the Government

 

          by their Agent, Ministerialdirigentin Irene MAIER of

          the Federal Ministry of Justice, who was assisted by

          Regierungsdirektor Dr.  Alexander MÜHLENDAHL and

          Richter am Verwaltungsgericht Hans KREUZBERG, both

          of the same Ministry, as Advisers.

 

12.     Following the hearing, the Commission declared the application

admissible.  The text of this decision, approved by the Commission

during its session in March 1986, was on 9 May 1986 transmitted to

the parties who were invited to submit before 30 June 1986 any

supplementary observations on the merits which they wished to make.

 

13.     The applicants submitted such observations on 23 June 1986.

The Government requested an extension of the time-limit until

30 September 1986 which the President granted on 16 July 1986.  The

Government's observations, accompanied by a legal expert opinion by

Professor Dr.  Gerhard Schricker, Director of the Max Planck Institute

for Foreign and International Patent, Copyright and Competition Law,

Munich, were received on 7 October 1986.

 

14.     On 11 October 1986 the Commission decided that each party

should have an opportunity to reply to the other's observations before

15 December 1986.  Only the applicants made use of this opportunity.

They submitted further observations on the merits on 5 December 1986.

 

15.     After declaring the case admissible, the Commission, acting in

accordance with Article 28 (b) of the Convention, also placed itself

at the disposal of the parties with a view to securing a friendly

settlement.  In the light of the parties' reaction, the Commission now

finds that there is no basis on which such a settlement can be

effected.

 

C.      The present Report

 

 

16.     The present Report has been drawn up by the Commission in

pursuance of Article 31 of the Convention and after deliberations and

votes, the following members being present:

 

                            MM.  C. A. NØRGAARD, President

                                 J. A. FROWEIN

                                 S. TRECHSEL

                                 G. SPERDUTI

                                 E. BUSUTTIL

                                 G. JÖRUNDSSON

                                 G. TENEKIDES

                                 B. KIERNAN

                                 A. S. GÖZÜBÜYÜK

                                 A. WEITZEL

                                 H. G. SCHERMERS

                                 H. DANELIUS

                                 G. BATLINER

 

 

17.     The text of this Report was adopted on 18 December 1987

and is now transmitted to the Committee of Ministers of the Council of

Europe, in accordance with Article 31 para. 2 of the Convention.

 

18.     The purpose of the Report, pursuant to Article 31 of the

Convention, is:

 

i)      to establish the facts, and

 

ii)     to state an opinion as to whether the facts found

        disclose a breach by the State concerned of its

        obligations under the Convention.

 

19.     A schedule setting out the history of the proceedings before

the Commission is attached hereto as Appendix I and the Commission's

decision on the admissibility of the application as Appendix II.

 

20.     The full text of the parties' submissions, together with

the documents lodged as exhibits, are held in the archives of the

Commission.

 

II.   ESTABLISHMENT OF THE FACTS

 

 

A.      The particular circumstances of the case&S

 

 

        1.  The applicants' activities in general

 

 

21.     The first applicant, "Markt Intern", is a private firm

which supports the interests of small businesses (mittelständische

Unternehmen) by its publications and certain other activities.  The

parties disagree on whether the predominant aspect of the firm is its

journalistic function, as submitted by the applicants (cf. paras. 91

et seq. below) or the fact that it also operates as a kind of

servicing enterprise for the specialised retail trade, as submitted

by the Government (cf. paras. 131 et seq. below).

 

22.     The first applicant claims to be both financially and

organisationally independent of the industry, the wholesale and

retail trade and their respective organisations.  It is not contested

that the firm's income is exclusively based on the sale of its

information bulletins, which do not contain advertisements or

sponsored contributions.

 

23.     Some of the bulletins are addressed to broad sectors of the

population such as taxpayers ("Steuertip"), holders of insurance

policies ("Versicherungstip") or air travellers ("Flugtip") and there

is also a bulletin for lawyers ("Rechtstip").  However, the emphasis

is placed on information bulletins for the specialised retail trade.

They include a general bulletin ("Markt Intern-Fachhandel") and

specific bulletins for 14 different commercial branches ("Branchen-

dienste") such as e.g. the radio, television and hi-fi branch ("Markt

Intern-Radio, Fernsehen, Hifi") or - as the publication concerned in

the present case - the chemists and beauty-shop branch ("Markt Intern

-Drogerie- und Parfümeriefachhandel").  These information bulletins

are mainly addressed to specialised retailers who form the large

majority of the readership.  However, the bulletins can also be

subscribed to by other interested persons or institutions outside the

branches.

 

24.     The bulletins pursue the declared aim of defending the

interests of specialised retailers, in particular in their competition

with large firms such as discount and mail-order shops, commercial

chains and supermarkets.  They provide information on market

developments including the commercial practices of those firms and

their suppliers, which are often dealt with in a critical way.  In

this context the applicants do not hesitate to publish "hard facts"

concerning certain named firms and to use an outspoken language.  They

do not deny a "tendentious approach" in their publications in favour

of small-business interests.  In order to promote these interests

"Markt Intern" also seeks to enlist the active participation of its

readership.  Thus it publishes various appeals to the readers,

organises polls and solidarity campaigns, etc.

 

25.     Apart from its publicistic support for the small and

medium-sized specialised retail trade, "Markt Intern" further engages

in a number of other activities in favour of this group.  These

include, inter alia, the financing of litigation in test cases, the

reporting of certain matters to the competent authorities, and also

direct lobbying.  To this end "Markt Intern" conducts correspondence

with State authorities, political parties, professional organisations,

etc.  It has also made a number of specific proposals for legislation.

 

26.     The above activities have given rise to various proceedings

being taken against the first applicant by certain commercial enterprises

criticised in the information bulletins or affected by action proposed

therein.  The case at issue in the present application is related, in

particular, to certain other proceedings by which "Markt Intern"

publications were restricted as constituting inadmissible boycott

calls (see paras. 51-57 below).

 

 

        2.  The publication at issue in the present case

 

27.     The present case concerns an issue of the "Markt Intern"

bulletin for the branch of chemists and beauty shops published on

20 November 1975.  It contained a report written by the second applicant

dealing with the activities of an outsider in the branch, a kind of

mail order shop, called "Club X".

 

28.     The report was couched in the following terms:

 

(German)

 

        "'Habe beim Club X das Schönheits-Set ... ...

von April bestellt und bezahlt, aber wegen

Nichtgefallen nach wenigen Tagen zurückgesandt.

Obwohl auf dem Bestellcoupon klar und deutlich

geschrieben steht, dass ich bei Nichtgefallen

berechtigt bin, das Set zurückzusenden und mir

Erstattung zugesichert wird, habe ich bis heute

keinen Pfennig wiedergesehen.  Auch auf meine

Abmahnung vom 18.  Juni mit Fristsetzung 26.  Juni

erfolgte keine Reaktion.'

 

        So der empörte Bericht der Drogistin L über

die Geschäftstätigkeit des aus England importierten

Clubs.

 

        Unser Telex vom 4.  November an Club X-

Geschäftsführerin M: 'Handelt es sich hier um eine

Einzelpanne, oder gehört dieses Verhalten zu Ihrer

offiziellen Politik?'  In seiner prompten Antwort tags

darauf will der Club X weder etwas von Frau Ls Set-Retoure

noch von ihrer Abmahnung im Juni wissen.  Er verspricht

aber eine sofortige Untersuchung des Falles sowie

eine klärende Kontaktaufnahme mit der Drogistin in C.

 

        Unabhängig von dieser vorläufigen Antwort ...

unsere Frage an alle Drogerie/Parfümerie-Kollegen:

Haben Sie ähnliche Erfahrungen wie Frau L mit dem

Club X gesammelt?  Oder sind Ihnen ähnliche Fälle

bekannt?  Die Ein- oder Mehrmaligkeit solcher

Fälle ist für die Beurteilung der Club X-Politik

äusserst wichtig."

 

(English translation)

 

        "'In April I ordered and paid the beauty

set .. from Club X, but returned it a few days later

because I was dissatisfied.  Although the order

form clearly says in express terms that I am entitled

to return the set if I am dissatisfied, and that

I will be reimbursed, I have not seen a penny since

then.  There was also no reaction to my

reminder of 18 June in which I set 26 June as the

latest date.'

 

        This is the angry report of Mrs.  L, a chemist

at C, concerning the commercial practices of this Club

imported from England.

 

        Our telex of 4 November to Club Manager M:

'Is this an isolated incident, or is this part of

your official policy?'  In its swift answer of the

following day the Club denies knowing anything of the

set returned by Mrs.  L nor of her reminder of June.

It promises however a prompt investigation of the case

and the clarification of the matter by contacting the

chemist in C.

 

        Notwithstanding this provisional answer we put

the question to all chemists / beauty-store colleagues:

Do you have similar experiences as Mrs.  L with the Club?

Or do you know of similar cases?  The question of

whether there is one or more incidents of this kind is

very important for judging the policy of the Club."

 

 

 

        3.  The proceedings before the Regional Court of Hamburg

 

29.     "Club X" objected to this publication of the first applicant

and brought court proceedings in the Regional Court (Landgericht) of

Hamburg.  Its application to prohibit repetition of the above

statements was granted by an interlocutory injunction (einstweilige

Verfügung) of 12 December 1975.

 

30.     As the present applicants requested the clarification of the

matter in ordinary proceedings, "Club X" brought an action to this

effect, seeking the prohibition of the unqualified repetition of the

following statements:

 

        (i)    the statement that Mrs.  L had sent an angry report

saying that she had returned a beauty set without being reimbursed

despite her reminder;

 

        (ii)   the statement that the Club denied knowing anything of

the set returned by Mrs.  L or of her reminder;

 

        (iii)  the question to all chemists / beauty-store colleagues

whether they had similar experiences with the Club as Mrs.  L, whether

they knew of similar cases, and the statement that it was very

important for judging the policy of the Club whether there were one

or more incidents of this kind.

 

31.     The Regional Court of Hamburg decided on 2 July 1976:

 

        - to reject the action as regards statement (i) because it was

true and there was no danger that it would in future be repeated

without taking into account further developments;

 

        - to allow the action as regards statements (ii) and (iii) on

the basis of Section 824 of the Civil Code.  The Court considered that

these statements amounted to voicing a suspicion of doubtful

commercial practices of "Club X" without sufficient basis in the

facts.  The applicants had disregarded their journalistic duties by

proceeding to a premature publication without further investigation,

other than inviting negative reports from chemists / beauty-store

keepers.

 

32.     The Court denied the applicability of Section 823 of the Civil

Code and of the Unfair Competition Act, on the ground that there was

no competitive relationship between the applicants as publishers and

the cosmetics firm "Club X", and also because the publication was

addressed to chemists / beauty-store keepers and not to the clients

of "Club X".

 

 

        4.  The appeal proceedings before the Hanseatic Court of Appeal

 

 

33.     The applicants' appeal (Berufung) against the above judgment

was successful.  The Hanseatic Court of Appeal (Hanseatisches Ober-

landesgericht) dismissed the whole of the action against the

applicants by a decision of 31 March 1977.

 

34.     The Court found that neither Sections 823 or 824 of the Civil

Code, nor Sections 1 and 14 of the Unfair Competition Act provided a

basis for the claim raised in the action.

 

35.     As regards the Unfair Competition Act, the Court considered it

as inapplicable in the absence of a competitive relationship between

the applicants as publishers, and the plaintiff "Club X" as a cosmetics

enterprise.  Furthermore there was no promotion of the competitiveness of

others as the applicants did not intend to promote the sales of chemists'

shops.  The article was addressed to chemists and not the common

clients of these and of the "Club X", and its principal aim was to

inform these chemists of the commercial practices of that firm.

 

36.     As regards Sections 823 and 824 of the Civil Code, the Court

stated that they prohibited only untrue statements likely to interfere

with an established commerce or its reputation.  Commercial

enterprises acted in the public sphere and had to tolerate true

statements criticising their commercial practices.  It was in fact a

task of the press to report on commercial enterprises.  The

applicants' allegations were in substance true and justified doubts as

to the plaintiff's practices.  They did not insinuate more than a doubt

in this respect, as the final position was expressly reserved.

 

     5.  The appeal proceedings before the Federal Court of Justice

 

 

37.     The plaintiff, "Club X", lodged a further appeal on points of

law (Revision) with the Federal Court of Justice (Bundesgerichtshof),

which on 16 January 1980 reversed the Court of Appeal's judgment and

allowed the whole of the action, i.e. in respect of all three

incriminating statements, on the basis of competition law.

 

38.     The Federal Court found that Section 1 of the Unfair

Competition Act was applicable despite the absence of a direct

competitive relationship as between the parties.  It was sufficient

that the applicants had acted with intent in a manner likely to promote

the competitiveness of others to the detriment of the plaintiff.

 

39.     The Court of Appeal had wrongly denied the applicants'

intention to promote the competitiveness of specialised chemists, on

the exclusive basis of the argument that the publication was addressed

to the latter and not to their and the plaintiff's common clients.  In

doing so, the Court of Appeal had failed to take the surrounding

circumstances of the publication sufficiently into account.

 

40.     The Federal Court further stated that the publication in fact

inserted itself in a campaign staged by the applicants on behalf of

chemists in order to protect their interests against the intrusion of

a mail order shop, i.e. an outsider, into the branch, and this was

shown by a number of earlier articles, which inter alia accused

"Club X" of operating with false data and promises and stated, in the

context of a report on judicial proceedings, that the campaign with

the industry to boycott the Club had been successful.  The applicants

thereby had gone beyond the mere information of chemists, but had

identified themselves with the interests of this branch and had raised

doubts as to the commercial practices of "Club X" by inviting chemists

to submit evidence against it.  Having regard to normal standards of

behaviour it was quite unusual that the applicants should have done so

on the basis of a single incident which they themselves admitted had

not been completely clarified and could have been an isolated case,

and it was even more unusual that in these circumstances they had

endeavoured to insinuate improper practices of "Club X" and to invite

further negative reports.

 

41.     Section 1 of the Unfair Competition Act was not only

applicable, but also violated.  This conclusion could be drawn by

the Federal Court itself as the facts were sufficiently clear.

 

42.     The Federal Court found each of the applicants' incriminating

statements to be contrary to honest practices (gute Sitten) and thus

in breach of Section 1 of the Act.  This also applied to the factual

assertions concerning the case of Mrs.  L (statement (i), para. 30

above) although the Federal Court acknowledged that these assertions

were true.

 

43.     The Federal Court justified the restriction by the following

general consideration:

 

"A true statement which is damaging to business is not

necessarily free from the charge of being contrary to

the principles of fair competition merely because it is

true.  According to the rules of competition, because

it is against honest practices to conduct one's

competition by making disparaging statements about

competitors, such statements are only admissible if the

competitor who makes them has sufficient cause to do so

and the manner and extent of his criticism remains

within the limits of what the situation requires."

 

44.     Concerning the particular case, the Federal Court added the

following:

 

"At the time of the publication there was not sufficient

cause to report this incident.  The exact circumstances

had not yet been clarified, the plaintiff in its reply

had agreed to an immediate investigation and to contacting

Mrs.  L to clarify the position.  The defendants were

aware that further clarification was necessary before

it was certain that justified criticism could be

levelled at the plaintiff as they themselves had

described the plaintiff's reply as a provisional

answer.  In these circumstances, the defendants should

have taken into consideration that the premature

publication must have adverse effects on the

plaintiff's business because it gave the specialist

retailers an effective argument to use against the

plaintiff with their common customers, and one which

could be used even if the incident should turn out to

be an isolated mishap from which no conclusion could be

drawn as to the plaintiff's business policy.  Taking

these considerations into account, at all events at the

time of the publication, there was not sufficient ground

for reporting this isolated incident.  Such conduct is,

moreover, very unusual in business competition."

 

45.     According to the Federal Court, the restriction of the second

statement was also justified as it was a mere extension of the

first and had to be judged by the same legal standard.  The negative

impression created by the simple reporting of the incident was

reinforced by the allegation that firm X lacked credibility when it

"denied knowing of anything" ("will [nichts] wissen") of the beauty

set returned by Mrs.  L and her reminder.  The Court of Appeal had

failed to explain why it had interpreted these words in a manner

departing from their generally accepted meaning.

 

46.     Finally, as regards the third statement, the Federal Court

noted the applicants' argument that it was only a value judgment

(Werturteil) and could not be objected to as such.  However, the Court

considered it was not decisive whether it was a value judgment or a

statement of fact.  The expression of a value judgment could also have

an inadmissible influence on the state of competition contrary to

Section 1 of the Unfair Competition Act.  At all events in the present

case there had been insufficient cause for making such far-reaching

insinuations ("fehlte es an einem hinreichenden Anlass für eine so

weit reichende Verdächtigung").  Such an isolated case did not

at once justify making the suggestion that the plaintiff was

pursuing a deceitful business policy.  Furthermore, it was contrary

to established commercial custom ("kaufmännische Sitten") to call on

people to send in incriminating material in such circumstances.

 

47.     The Federal Court finally observed that the applicants knew

the circumstances which made their statements incompatible with

honest practices, and therefore concluded that the subjective

conditions for applying unfair competition law were also met.  A

danger of repetition had to be generally assumed in cases of unfair

competition, even regarding a press publication as the present one

where it was to be expected in the circumstances that the discussion

of the matter had not been completed by a single report.

 

48.     The applicants were accordingly forbidden to repeat their

above statements, under sanction of a (non-criminal) fine

(Ordnungsgeld) of up to DM 500,000 in each case of contravention, to

be replaced by (non-criminal) detention (Ordnungshaft) in case of

default (up to a total of two years).

 

 

        6.  The proceedings before the Federal Constitutional Court

 

 

49.     The applicants then filed a constitutional complaint

(Verfassungsbeschwerde) in which they invoked the freedom of the press

as guaranteed by Article 5 of the Basic Law (Grundgesetz).  However,

the Federal Constitutional Court (Bundesverfassungsgericht), acting

through a three-judge committee according to Section 93a para. 2 of

the Federal Constitutional Court Act, rejected the complaint by a

decision of 9 February 1983, stating that it lacked sufficient

prospects of success.

 

50.     This decision was based on the following reasons:

 

(German)

 

        "Wie das Bundesverfassungsgericht in seinem

Beschluss vom 15.  November 1982 (1BvR 108/80 u.a.)

entschieden hat, fehlt es an der Voraussetzung für

einen Vorrang der Meinungs- und Pressefreiheit vor

durch allgemeine Gesetze geschützten Rechtsgütern,

wenn eine Presseveröffentlichung der Durchsetzung

wirtschaftlicher Interessen gegen andere wirtschaft-

liche Interessen im Rahmen des wirtschaftlichen

Wettbewerbs dient.  Dies ist bei den vom Bundesgerichts-

hof untergesagten Äusserungen der Fall.  Art. 5 Abs. 1

Satz 2 GG erforderte daher keine andere Auslegung und

Anwendung des § 1 UWG als es in der angegriffenen

Entscheidung geschehen ist.

 

        Da diese nicht auf einer Verletzung des Art. 5

Abs. 1 Satz 2 GG (Pressefreiheit) beruht, kann es nicht

darauf ankommen, dass sich der Bundesgerichtshof in den

Entscheidungsgründen nicht ausdrücklich mit der Frage

der Bedeutung der Pressefreiheit bei der Anwendung des

§ 1 UWG auseinandergesetzt hat."

 

(English translation)

 

        "As the Federal Constitutional Court held in its

decision of 15 November 1982 (1 BvR 108/80 and others),

the requirements for priority to be given to freedom of

opinion and freedom of the press over legal interests

protected by 'statutes of general application' are not

satisfied if a publication in the press serves the

purpose of promoting certain business interests against

other business interests in the context of business

competition.  This is the case as regards the

statements forbidden by the Federal Court.  The second

sentence of Article 5 para. 1 of the Basic Law does not

therefore require a different interpretation and

application of Section 1 of the Unfair Competition Act

from that given by the judgment appealed against.

 

        As this decision is not based on a violation of

the second sentence of Article 5 para. 1 of the Basic

Law (freedom of the press) it is not decisive that the

Federal Court did not deal expressly, in the reasons

for its decision, with the question of the significance

of the freedom of the press in relation to the

application of Section 1 of the Unfair Competition Act."

 

 

        7.  Previous litigation

 

 

51.     Further litigation in which the first applicant was involved

(cf. para. 26 above) included, amongst others, three sets of

proceedings under unfair competition law taken by a firm which runs

self-service stores for ultimate consumers.  The Federal Constitutional

Court's reference in the present case to principles laid down in an

earlier decision (cf. para 50 above) related to proceedings in which

"Markt Intern" itself had been involved.

 

52.     The facts of those earlier cases may briefly be described as

follows:

 

        - In the first case, the applicants had staged a so-called

teaching lesson ("Denkzettelaktion") against manufacturers of

household electrical appliances who conceded price reductions to

supermarkets.  They had invited specialised retailers to denounce such

manufacturers, proposing that they should be struck off the retail

trade register and be excluded by the co-operatives and buyers'

associations from the buyers' exchanges.

 

        - In the other two cases, the applicants had invited

specialised retailers of photographic equipment to refuse buying

brand-name articles from manufacturers who also supplied supermarkets,

and to denounce those manufacturers.

 

53.     In its judgments of 13 November 1979 (KZR1/79) and of

5 February 1980 (KZR2/79 and KZR3/79), the Federal Court of Justice

considered the applicants' actions, in all three cases, as being

unlawful calls for a boycott and thus anti-competitive behaviour

contrary to Section 1 of the Unfair Competition Act.  It held that the

actions were not covered by the basic right of freedom of the press

because they were not restricted to putting forward a view, contesting

divergent opinions and convincing by force of argument but rather

actively interfered in the play of competitive forces by taking the

side of the retail specialists:  In the first case, the actions had

not been limited to a call for an uncompetitive boycott, but had

included practical and organisational steps to prepare its

implementation.  In the second and third cases the applicants had

imposed a restriction, alien to the concept of competition, on the

freedom otherwise enjoyed by the brand-name producers concerned to

take their own decisions without economic pressure.

 

54.     The applicants' constitutional complaints against these

decisions were examined jointly and the Federal Constitutional Court

rejected them by a decision of 15 November 1982 (1 BvR 108/80,

1 BvR 438/80, 1 BvR 437/80).

 

55.     The Court first recalled its constant case-law on the

importance of the fundamental right of freedom of the press and its

possible limitation by statutes of general application which for their

part must be interpreted in the light of the significance of the

fundamental right.  Turning to the facts of the concrete case the

Federal Constitutional Court found that the articles at issue, while

still falling within the area protected by the freedom of the press,

were nonetheless restricted by Section 1 of the Unfair Competition Act

and in the latter's quality as a statute of general application.

 

56.     As the applicants had wanted to interfere actively in the

competition, they had to accept the responsibility for the economic

pressure they wanted to exert and which was not a press-style

influencing of the public opinion.  In this respect, the Court

observed that the "Markt Intern" bulletins could only be obtained on

subscription and were sent to members of the specialist sectors

concerned so that it was hardly possible to speak of an attempt to

influence and mobilise public opinion, even less so since those who

were sent the disputed publication were scarcely in need of

enlightenment as to the unsatisfactory aspects of the competition

between small retailers and big stores.  The conduct of the applicants

could rather be viewed as an attempt to assert or at least to

contribute to an assertion of the interests of one group of

enterprises against those of another in a particular contest in the

economic sphere, and this was not altered by the applicants not

maintaining any competitive relationship with the plaintiff.

 

57.     As a result of the weighing of interests the Court concluded

as follows:

 

        "In principle freedom of expression and freedom

of press take priority over interests legally protected

by statutes of general application insofar as a

statement is part of the continuing intellectual

controversy and conflict of opinion on matters of

public importance which forms an essential part of the

free democratic system.  This condition is not

fulfilled when what is at stake is the advancement of

business interests to the detriment of other business

interests in the context of business competition.  The

fact that one interest is to be implemented with means

which, in principle, are protected by Article 5 para. 1

of the Basic Law can therefore not justify the

sacrifice of another interest protected by a statute of

general application which restricts freedom of the

press, in this case Section 1 of the Unfair Competition

Act.  To consider the boycott which the complainants have

called for as contrary to honest practices is therefore

not excluded by Article 5 para. 1 of the Basic Law."

 

B.      Relevant domestic law and practice&S

 

 

        1.  The Unfair Competition Act

 

58.     German law has contained special regulations against unfair

competition since 1896.  The legislation in force is the Unfair

Competition Act (Gesetz gegen den unlauteren Wettbewerb = UWG) of

7 June 1909 (Imperial Law Gazette p. 499) as amended.

 

59.     The original aim of the legislation was to increase the

protection of individual commercial enterprises against unfair

competition beyond the standard of the general law of torts

(see paras. 73 et seq. below).  A special liability was thus created

for acts done "in the course of business activities" and "for the

purposes of competition" (cf.  Section 1 of the Act).

 

60.     At the same time the legislation serves the public interest of

upholding fair competition.  Therefore the Act introduced penal or

regulatory sanctions for certain kinds of behaviour (cf. e.g.

Sections 4 and 15).  Moreover, the possibility to seek a civil

injunction (Unterlassungsanspruch) against certain acts of unfair

competition (including acts covered by the general clause of Section 1)

was made available not only to the direct victims of such acts,

but generally to business men with a similar trade and to certain

associations representing trade and consumer interests ("Verbandsklage",

cf.  Section 13).

 

61.     The public interest in upholding the competitive system as

such is also reflected in the interpretation of the substantive

content of the Act.  In particular, the more recent case-law

frequently refers to the fundamental importance of the principle of

fair and genuine competition based on efficiency (Leistungswettbewerb)

for the functioning of a free market economy.  The behaviour

prohibited by the Act is often referred to as "wettbewerbswidrig"

(= uncompetitive, contrary to principles of competition).

 

62.     Section 1 of the Act which was applied in the present case

reads as follows:

 

(German)

 

        "Wer im geschäftlichen Verkehre zu Zwecken des

Wettbewerbes Handlungen vornimmt, die gegen die guten

Sitten verstossen, kann auf Unterlassung und Schadens-

ersatz in Anspruch genommen werden."

 

(English translation)

 

        "Whoever, in the course of business activities,

commits, for the purpose of competition, acts contrary

to honest practices, may have proceedings taken against

him for an injunction and damages."

 

63.     This general rule is supplemented by a number of more specific

provisions which include, in particular,

 

        - a prohibition of misleading statements (irreführende

Angaben) made for purposes of competition (Section 3);

 

        - a prohibition of disparaging statements (Anschwärzung)

made for purposes of competition, i.e. factual allegations likely to

undermine a competitor's business or credit unless they can be proved

true (Section 14 para. 1).  A different standard applies to

confidential communications in which the informer or receiver has a

legitimate interest.  They can be restricted only if they are untrue

and they give rise to a claim for damages only if they are made in

knowledge of their untruth (Section 14 para. 2).

 

64.     In practice Section 1 is the provision most frequently

applied.  It has been interpreted by a wealth of case-law.  In the

leading commentary by Baumbach-Hefermehl (Wettbewerbsrecht, 14th

edition 1983) its discussion covers about a third of the space devoted

to the entire Act (some 500 pages of approximately 1500).

 

65.     The outstanding role attributed to Section 1 is due to its

construction as the general principle whose philosophy dominates the

whole Act.  The other provisions are seen as particular specifications

of this principle.  Accordingly there is no sharp dividing line

between Section 1 cases and cases covered by other provisions.  Nor

are matters excluded from one of these provisions necessarily excluded

from consideration under Section 1.

 

66.     On the whole, the terms of Section 1 are being widely

construed.  Its application does not necessarily presuppose that the

person acting has commercial activities of his own nor that there is

a direct competitive relationship.  The intentional promotion of the

competitiveness of others (Förderung fremden Wettbewerbs) is regarded

as sufficient a basis for liability under this provision.

 

67.     The central notion on which the concept of "unfair competition"

is based is "acts contrary to honest practices" (Handlungen gegen die

guten Sitten).  However, apparently there exists no uniform and

generally accepted ethical standard which could be applied in this

respect.  The courts have therefore adopted a casuistic approach.

 

68.     Acts which have been identified as being "contrary to honest

practices" include, inter alia, various forms of exerting

improper influence on customers such as pressure, molestation and, in

particular, deception by untrue or misleading advertising.  These acts

need not necessarily be directed against a particular co-competitor.

 

69.     Another group of acts "contrary to honest practices" comprises

various forms of unjustified interference with the business activities

of co-competitors including boycott measures.

 

 

        2.  International instruments against unfair competition

 

70.     Like all High Contracting Parties to the European Convention

on Human Rights the Federal Republic of Germany is bound by the Paris

Convention for the Protection of Industrial Property of 20 March 1883.

 

71.     Article 10 bis of this Convention, which was introduced in

1925, reads as follows:

 

        "(1) The countries of the Union are bound to assure

             to nationals of such countries effective pro-

             tection against unfair competition.

 

         (2) Any act of competition contrary to honest prac-

             tices in industrial or commercial matters con-

             stitutes an act of unfair competition."

 

72.     States have implemented this international obligation in

different manners.  Most of them have introduced special legislation

which contains broad general clauses based on criteria similar to

those applied in the Federal Republic of Germany, e.g. "honest

practices" (Austria, Belgium, Denmark, Greece, Luxemburg, Sweden),

"law, morals or honest practices" (Spain), "principles of professional

correctness" (Italy), "fair practices and customs" (Portugal),

"principles of fairness and trustworthiness" (Switzerland).  Some

countries (Netherlands, France) apply the general law of torts which

is given a special interpretation in unfair competition cases.

 

 

        3.  The general law of torts

 

73.     As already mentioned, the Unfair Competition Act supplements

the protection afforded by the general law of torts enshrined in the

Civil Code (Bürgerliches Gesetzbuch).  The relevant provisions have

not ceased to be applicable in the area of competition and are in

practice applied in a subsidiary manner.

 

74.     These provisions include, in particular:

 

        - Section 823 which stipulates the general liability in

damages of whoever, with intention or negligence, unlawfully causes an

injury to the life, person, health, freedom, property or other right

of other persons.  The case-law recognises, in particular, the "right

to an established and active commercial enterprise" ("Recht am

eingerichteten und ausgeübten Gewerbebetrieb") which is protected by

this provision against unlawful and faulty behaviour;

 

        - Section 824 which provides that a liability in damages

shall be incurred by anybody who, contrary to the truth, maintains or

disseminates a fact calculated adversely to affect a person's credit

or to produce adverse effects on his earning capacity or advancement.

This liability exists even when the person making the statement did

not know that the alleged fact was untrue if he should have known it.

However, there is no liability for a person who makes a statement

which he does not know to be untrue if he or the person to whom the

statement is addressed has a justifiable interest in this

communication;

 

        - Section 826 which stipulates a liability in damages for

any person who with intention acts contrary to principles of honest

conduct and thereby causes an injury to another.

 

        4.  The constitutional guarantee of freedom of expression

 

75.     The constitutional right of freedom of expression is laid down

in Article 5 of the Basic Law (Grundgesetz).  Paras. 1 and 2 of this

provision read as follows:

 

(German)

 

"(1)    Jeder hat das Recht, seine Meinung in Wort,

Schrift und Bild frei zu äussern und zu verbreiten und

sich aus allgemein zugänglichen Quellen ungehindert zu

unterrichten.  Die Pressefreiheit und die Freiheit der

Berichterstattung durch Rundfunk und Film werden

gewährleistet.  Eine Zensur findet nicht statt.

 

(2)     Diese Rechte finden ihre Schranken in den

Vorschriften der allgemeinen Gesetze, den gesetzlichen

Bestimmungen zum Schutze der Jugend und in dem Recht

der persönlichen Ehre."

 

(English translation)

 

"(1)    Everyone shall have the right to express freely

and disseminate his opinion by speech, writing and

pictures and freely to inform himself from generally

accessible sources.  Freedom of the press and freedom

of reporting by means of broadcasts and films are

guaranteed.  There shall be no censorship.

 

(2)     These rights are limited by the provisions of

statutes of general application, the provisions of law

for the protection of youth, and by the right to

inviolability of personal honour."

 

76.     According to the Federal Constitutional Court's case-law

"statutes of general application" are statutes which are not as such

directed against the expression of an opinion, but rather serve the

protection of a legal interest deserving protection in itself

regardless of any particular opinion.  The Unfair Competition Act

is regarded as such a statute.

 

77.     As regards the application of these general statutes in the

area where they might conflict with the exercise of freedom of

expression, the Federal Constitutional Court has developed a

consistent case-law since the Lüth case (BVerfGE 7, 198) according to

which they must be construed in the light of the significance of this

fundamental right, i.e. they must be interpreted having regard to the

values incorporated in freedom of expression in a free democratic

state and are thus themselves restricted in the restrictive effect

which they exercise on the fundamental right.

 

78.     This leads in consequence to an assessment of the relative

weight of the interests protected by the fundamental right of freedom

of expression on the one hand, and the interests protected by the

statutes of general application on the other.

 

III.  SUBMISSIONS OF THE PARTIES

 

A.      The applicants

 

79.     The applicants allege a violation of their right to freedom of

expression as guaranteed by Article 10 of the Convention.

 

80.     The starting point of the examination under the Convention

must be the final decision of the highest competent German

jurisdiction, i.e. the judgment of the Federal Court of Justice of

16 January 1980.

 

81.     This decision is exclusively based on Section 1 of the Unfair

Competition Act.  Unlike the lower courts the Federal Court of

Justice did not apply the provisions of the Civil Code, in particular

Section 824.

 

82.     It is not for the Commission to qualify the facts differently

from the Federal Court.  The arguments of the Government and their

expert which are based on a different legal qualification are

irrelevant.

 

83.     However, the Commission cannot be bound by the decision of the

Federal Court in the sense that it must base its examination under the

Convention on the same legal concepts which were applied for the

purposes of the domestic law.  Such a binding effect of domestic

legal concepts would improperly interfere with the control functions

entrusted to the Commission by the Convention.

 

84.     In the present case it is therefore inappropriate to consider

as binding the Federal Court's statement that the applicants had acted

"for the purposes of competition" when they published their article.

Contrary to the Government's submissions it is not an established fact

that there has been an act done "for the purposes of competition".

 

85.     In reality the Federal Court's statement in this respect is

not of a factual but of a legal nature.  The Federal Court has no

fact-finding competence.  Its jurisdiction is limited to deciding

appeals on points of law.

 

86.     In the present case the underlying facts were essentially

uncontested.  However, the Federal Court's legal appreciation of these

facts was different from that of the Court of Appeal when it confirmed

the existence of an act of competition.  This is clearly borne out by

the wording of the Federal Court's judgment.  It is exclusively based

on legal considerations, not on factual arguments.

 

87.     In the applicants' submission it is precisely the extension

of the legal concept of "acts done for the purposes of competition" to

press publications such as their own which is incompatible with

freedom of expression as laid down in Article 10 of the Convention.

 

88.     The applicants claim that such a broad legal concept of "acts

done for the purposes of competition" does not exist in other States.

In their opinion even the comparative legal material submitted by the

Government's expert confirms this view.  None of the foreign cases

cited by the expert is directly comparable to the facts of the present

case.

 

89.     Article 10 is applicable to a publication of the kind in

question.  The Government's arguments to the contrary are based on a

misunderstanding of the scope and importance of this provision.

 

90.     The applicability of Article 10 cannot be denied on the basis

of the argument that the restriction resulted from a litigation between

private parties.  The plaintiff firm could sue the applicants only

because the Federal Republic has adopted a legal system which enabled

this firm to seek a restriction of the applicants' publication on the

basis of competition law.

 

91.     The application of Article 10 is not excluded because of the

nature of the applicants' activities.  It is inadmissible and would

amount to discrimination contrary to Article 14 of the Convention if

the enjoyment of the rights under Article 10 were made dependent on

the degree of involvement for certain group interests.

 

92.     Freedom of expression protects everybody who wants to impart

certain information to the public which he considers as deserving

dissemination and whose dissemination is possible by the existence of

a corresponding demand.  Curtailing the freedom of expression of those

who articulate particular interests, especially in the economic field,

would have a chilling effect on the press.  Publications of interest

groups pursue a legitimate function which is essential for the

functioning of a liberal State.

 

93.     It is not justified to describe publications articulating

particular interests as being biased or improper and oppose them to

so-called "objective" press information.  The applicants admit the

"tendentious" nature of their publication activities.  However, the

term "tendentious" is not to be understood in a negative sense.  It is

a legal term frequently used in the Federal Republic of Germany in

order to designate a link to specific interests.

 

94.     Notwithstanding the "tendentious" nature of their publications,

the applicants claim that they are part of the independent press.  The

fact that unlike other newspaper publishers they openly declare their

publication policy in favour of a particular group cannot be held

against them.  Even publications which do not openly declare their

aims may in reality pursue certain specific interests.

 

95.     "Markt Intern" has been created and is being run by

journalists.  Its principal shareholder and manager had originally

worked for a consumer magazine and had discovered that the retail

trade was underrepresented in the publicistic debate.  Only the industry

and the consumers had their own powerful magazines.  The publications

of economic associations (Verbandspresse) could not adequately reflect

the particular interests of small business enterprises because of the

structure of the relevant associations.  They regularly group not only

the small, but also the big enterprises of a branch.

 

96.     The "Markt Intern" information bulletins were especially

designed to fill this gap and help create fair conditions of

competition for small business enterprises.  These enterprises are in

a difficult position and structurally in danger.  On the one hand they

are expected to perform a considerable number of special services.  On

the other hand they are being granted the least favourable conditions

by the industry.

 

 

97.     The "Markt Intern" information bulletins have been accepted by

their target group and in fact fulfil an important function.  It is

unjustified to contest the seriousness of these publications or to

regard them as superfluous because there are other publications with a

similar function.  It is part of the freedom of information of the

readership to decide themselves which publications they consider as

most representative of their interests.  It is not for the State to

give the citizen any instructions on the type of publications which he

should or should not read.

 

98.     "Markt Intern" also lobbies for small business interests in

direct contacts with the Government, interest groups and politicians.

It participates in the general political debate on economic

questions.  When it described itself as a "professional organisation

representing small business interests" ("Standesorganisation des

Mittelstandes"), it only took up a formula which had developed among

the readership.

 

99.     However, unlike professional organisations "Markt Intern" is

totally independent of the group whose interests it promotes.  In

particular, it is financially independent of the retail trade.  Its

independence is increased by the fact that it does not accept

advertisements or other sponsored publications.

 

100.    "Markt Intern" is exclusively financed by the sale of its

publications and depends on the existence of a market for them.

Their preparation and distribution is exercised as a commercial

activity and thus falls within the scope of freedom of occupation and

trade (Berufs- und Gewerbefreiheit) as understood in the German legal

system.  The same applies to any other press company and therefore can

be no reason to withhold the protection of the freedom of expression

from its publications.

 

101.    The adoption of a publication policy which deliberately

favours small business interests was the free choice of "Markt

Intern" itself.  The applicants consider that, by trying to secure an

adequate place to the specialised retail trade in the system of the

social market economy, "Markt Intern" performs a function in the

public interest.  By its publication policy "Markt Intern" thus does

not promote egoistic private interests of its own.  Accordingly, it

has no self-interest in the development of competition (kein

unmittelbares eigenes Interesse am Wettbewerbsgeschehen).

 

102.    The nature of its publications, no more than the general

nature of its activities, does not remove "Markt Intern" from the

protection of Article 10 of the Convention.

 

103.    The particular form of a publication does not make any

difference for the application of Article 10.  The "Markt Intern"

bulletins are printed in offset technique.  The fact that the printing

matrices are being prepared in typescript is irrelevant.

 

104.    Nor is the size and nature of the readership a criterion for

the application of Article 10.  Every press publication has its

particular and therefore more or less limited target group.  It would

be unjustified to reserve freedom of the press only for the mass media

with the widest circulation.  Therefore it is irrelevant that the

bulletins are mainly addressed to the relatively small group of

specialised retailers.

 

105.    The scope of Article 10 is not limited to general press

organs.  Freedom of expression does not only protect statements based

on concern for political, economic, social and cultural matters of

interest for the general public.  Its limitation to these matters is

unrealistic and would lead to a complete erosion of this fundamental

right.

 

106.    In a pluristic society the individual must be able to

articulate his complaints and speak about everything which concerns

him irrespective of whether it is a matter of general public interest.

Moreover, matters concerning only one social group are also public

matters irrespective of whether the group in question is small or

relatively important in comparison to the population as a whole, and

irrespective of whether the statements made about these matters are

favourable, unfavourable or neutral.

 

107.    Also, the application of Article 10 is not limited to

statements which form part of an "intellectual contest of opinions".

Freedom of expression comprises the dissemination of information as

well as of opinions.  Even if this element should not be covered by

Article 5 of the Basic Law, it is in any event expressly mentioned in

Article 10 of the Convention.  Information is moreover an essential

condition for a meaningful "intellectual contest of opinions".

 

108.    This also applies in the economic field.  This is not a minor

or secondary field of application of Article 10.  Economic activities

are of vital importance for everybody.  Those who participate in them

must be able to obtain the information which allows them to take the

right decisions.  A particular need to obtain information on market

developments exists for specialised retailers as a group whose

economic survival is structurally in danger.

 

109.    There is no justification to exclude discussion of economic

matters from the scope of freedom of expression, even where it

involves the articulation of particular interests.  If it may appear

justified to apply a different standard to certain publications, this

can be done in the context of Article 10 para. 2, but no publication

can as such be excluded from the scope of Article 10 para. 1.

 

110.    Whether or not this is also true in respect of commercial

advertising need not be decided in the present case.  Neither the

general activities of "Markt Intern" nor the particular publication at

issue have anything to do with advertising.

 

111.    The applicants further stress that this publication did not

involve a boycott appeal as some of their earlier publications.  The

fact that they had submitted joint constitutional complaints in this

case and in the boycott cases, arguing that all cases raised essentially

the same legal issues, cannot be held against them because in reality

the present case is fundamentally different.

 

112.    The applicants emphasise that all facts reported in the

restricted publication were true.  This was also acknowledged by

the Federal Court of Justice.

 

113.    The applicants observe that there had indeed been irregularities

in the behaviour of "Club X".  It had not reacted to the return of the

beauty set by Mrs.  L nor to her reminder.  There is no indication that

Mrs.  L failed to mention her address as the Government claim.  The

facts were not definitely clarified because of the injunction issued

against the applicants.

 

114.    The applicants deny that the publication was part of a

campaign against "Club X".  They observe that the earlier allegation

against the Club that it operated with false data and promises (para.

40 above) had not been taken up in court proceedings.  They admit

that the statement at issue in the present case was couched in rough

language.  On the other hand, it was made abundantly clear that no

final opinion could be expressed without further information.  It was

the very purpose of the publication to collect such information.

 

115.    In the applicants' view there is no justification of the

restriction of this publication under Article 10 para. 2 of the

Convention.  None of the criteria of this provision - lawfulness,

legitimate purpose, necessity in a democratic society - is met.

 

116.    The restriction cannot be regarded as being "prescribed by law"

because Section 1 of the Unfair Competition Act lacks the necessary

clarity.  Although it may be necessary to introduce a general clause

in the legislation against unfair competition, its scope must be

circumscribed in a foreseeable manner.  The judicial extension of

unfair competition law to press publications such as the one at issue

is arbitrary and inappropriate.

 

117.    Also the purposes pursued by the legislation are allegedly not

in line with Article 10 para. 2.  In the applicants' view the primary

object of the Unfair Competition Act as applied in practice is not the

protection of the "reputation and rights of others", but the defence

of the system of genuine competition as such.  However, this aim

cannot be brought under the "prevention of disorder" clause in

Article 10 para. 2.  It does not embrace any kind of regulations which

serve a purpose of public policy, but is limited to upholding the

external social order.

 

118.    The concern to protect the system of competition as such is

clearly reflected in the expert opinion submitted by the Government.

The expert, Professor Schricker, has been inspired by this aim of the

unfair competition law and therefore has overlooked that the practice

of the German courts fails to strike the right balance with the

necessity to protect freedom of expression.

 

119.    In this context the applicants criticise the following

passage in Professor Schricker's opinion which they regard as

particularly revealing:

 

        "That the European Convention on Human Rights might

        postulate the unification of the highly differentiated

        and nuanced judicial practice in the extreme form of

        allowing competitive criticism unconditionally, would

        almost certainly represent a barely tolerable outcome

        not only for the Federal Republic of Germany, but also

        for many other European States."

 

120.    With reference to their own case, the applicants observe that

the Federal Court of Justice in its reasons justifying the restriction

invoked general principles rather than the need to protect particular

rights of "Club X".  It is submitted that, apart from the right to

bring proceedings under the Unfair Competition Act, that firm did not

have any such right.

 

121.    The applicants finally contest the necessity of the

restriction in a democratic society.  They do not agree that in the

area of competition law the States must have a particularly wide

margin of appreciation.  The principles of the Handyside judgment

(Eur.  Court H.R., judgment of 7 December 1976, Series A no. 24)

concerning the different concepts of morality in the various

Contracting States are not applicable to questions of commercial

morality.  The latter belong to a different sphere in which there is

much less difference from one State to another.

 

122.    It is not necessary to extend the concept of "acts done for

purposes of competition" to press publications based on true facts and

to apply a particularly strict standard to such publications.  The

applicants do not claim that their publication was neutral, that

it could not influence competitive relationships.  However, any such

effect must not necessarily lead to the conclusion that there is an

act "done for the purposes of competition".

 

123.    The applicants observe in this context that, unlike the Civil

Code, the Unfair Competition Act does not require any subjective

element.  Moreover, the practical application of the Act is based on

vague principles which are not easily foreseeable.  The uncertainty

created by these circumstances must have a chilling effect on the

press.  In order to avoid litigation it will prefer not to address

certain subjects, or at least not to address them in a clear and

outspoken language.

 

124.    The applicants further submit that in weighing the

conflicting interests the Federal Court did not strike the right

balance.  The fact that market conditions are at issue does not

justify a derogation from the obligations under the Convention.

However, the Federal Court gave precedence to the economic interests

of "Club X", even though its conduct may have given rise to legitimate

concern.  On balance it decided against freedom of speech and thus

reversed the order of priority between this freedom and permitted

exceptions to it.

 

125.    "Club X" would not have been without protection if the

applicant's freedom of expression had not been restricted by the

injunction.  In the applicants' view it would have been sufficient

for this firm to make use of its right of reply (Gegendarstellung)

in order to protect its legitimate interests.  This, too, shows that

the restriction was not necessary.

 

126.    Finally, the applicants observe that "Club X" did not suffer

any damage.  The criticism was even beneficial for the firm itself

and, indirectly, for the general public because the firm was incited

to control and reorganise the practices of its sales department.

 

127.    On the other hand, the applicants refer to the frequent

litigation in which they have been involved because of the courts'

extensive application of unfair competition law.  They submit that

their journalistic activity as such is thereby menaced at its root.

Also for this reason they regard the restriction imposed on them in

this case as disproportionate.

 

128.    In conclusion the applicants therefore maintain that there has

been an unjustified interference with their right to freedom of

expression as guaranteed by Article 10 of the Convention.

 

 

 

B.      The Government

 

 

129.    The Government consider that Article 10 of the Convention is

not applicable to the present case.

 

130.    In their view the applicants do not belong to the independent

press.  The numerous activities in which "Markt Intern", the first

applicant, engages, apart from publishing its bulletins, go beyond the

tasks normally associated with journalism.  The firm represents the

economic interests of the specialist retail trade and functions as the

mouthpiece of this trade in its relations with the general public, the

legislator, the suppliers and the customers.  It attempts to influence

the individual members of the groups represented and to assert their

economic interests through solidarity campaigns, boycott calls,

appeals for test purchases, lobbying, financing and conducting

litigation in test cases, etc.

 

131.    "Markt Intern" has advertised itself as a private professional

organisation representing small business interests (Standesorganisation

des Mittelstandes).  The second applicant has given an interview in

which he stated that the editorial staff of "Markt Intern" were more

than merely journalists, they were the journalistic lobby of small

business.

 

132.    Therefore, "Markt Intern" is not an independent organ of the

press but rather a service enterprise for the specialist retail trade,

financed by selling the various information bulletins and counting

among the services it performs the expression of a journalistic

opinion in favour of small business interests.

 

133.    The information bulletins consist of a kind of public

relations advertising for the specialised retail trade.  They are

based on a pre-programmed negative criticism of those competing

against this trade and producers who do not conduct themselves in

conformity with its economic interests.  Because of the articulation

of the interests of a particular group these publications distinguish

themselves from the independent economic press.  They are rather

comparable to publications of interest groups.

 

134.    Contrary to the applicants' submissions, "Markt Intern"'s

information bulletins do not only serve to reduce information deficits

of specialised retailers concerning the market conditions.  They aim

at the one-sided and tendentious support for specialised retailers and

attempt directly to influence competition for the benefit of this

group.

 

135.    The applicants have admitted the tendentious nature of the

bulletins and also the difference between these bulletins and normal

press media.  In a case concerning the applicability of the newspaper

rate for the post delivery of "Steuertip", it was submitted that this

publication was an ordinary newspaper or journal to inform the public

about daily events, current issues or specialist questions, and that

it was fundamentally different from the branch information services

which took up topics in a tendentious fashion in favour of specialist

retailers.

 

136.    The Government refer to the frequent litigation in which

"Markt Intern" has been involved.  In the Government's view this is

explained by the special nature of the information bulletins and the

fact that, in the attempt of influencing competition in favour of

small business interests, they often perform a balancing act on the

borderline of legality.

 

137.    There is no question that "Markt Intern" is to be hindered in

its objective press function of observing the market.  Problems only

arise where "Markt Intern" acts in the sphere of competition in the

market by the one-sided safeguarding of the interests of one business

group against another competing group.

 

138.    The applicants have admitted in their pleadings before the

Federal Constitutional Court that restrictions are being applied to

them only in this area.  In particular, they stated the following:

 

        "The Federal Constitutional Court has

repeatedly affirmed the press character of the sister

paper of the Markt Intern journals with which we are

concerned here - a paper of the same character and with

the same appearance.  ...  Within the framework of

press freedom the Court has acknowledged Markt Intern's

right to express its views - in the manner Markt

Intern considers appropriate - just as freely and as

unhindered as any other citizen can, although it sets

limits to this where Markt Intern supports the

interests of one business group against another

competing group."

 

139.    As regards the competitive intent of "Markt Intern" the

Government refer to the findings of the Federal Court of Justice

which they consider as binding for the Commission.

 

140.    The finding of the Federal Court that there had been an action

with competitive intent is a finding of fact.  It is true that as the

final instance adjudicating on the facts the Hanseatic Court of Appeal

had made a finding to the contrary.  However, this finding was then

successfully contested in an appeal on points of law because the Court

of Appeal had overlooked part of the submissions of the criticised

firm in a manner contrary to procedural law.

 

141.    Normally the Federal Court could have set aside the judgment

on points of law and fact and remitted the case to the Court of Appeal

on these points.  In the present case, by way of exception, the

Federal Court was able to make the necessary findings itself.  This

follows from the text of the Federal Court's judgment.

 

142.    The Federal Court found that, contrary to Section 286 of the

Code of Civil Procedure (Zivilprozessordnung), the Court of Appeal had

not given sufficient consideration to the circumstances as a whole and

had not dealt exhaustively with the plaintiff firm's submissions of

fact.  These submissions had remained uncontested.  Also the facts

in question had already been established earlier in proper court

proceedings.

 

143.    The Government observe that in their constitutional complaint

the applicants did not complain of this specific way of proceeding of

the Federal Court.  They would have had an opportunity to do so.

Either they could have claimed that, in ascertaining the facts, a

basic right had been violated or that the impugned judgment was based

on arbitrary assumptions of fact.

 

144.    Apart from that the Federal Constitutional Court was not

entitled to carry out a full review of the facts.  It is not a

last instance court and in its practice it respects the functions

assigned to the specialised jurisdictions.  Within these limits, the

Federal Constitutional Court carried out a full examination of the

case in the light of the constitutional law.

 

145.    In this context the Government refer to the special principles

which the Federal Constitutional Court applies when it reviews

constitutionality in cases of civil litigation.  It does not review

the interpretation and application of the legal provisions of the

private law as such or the establishment and assessment of the

relevant facts.  However, it reviews whether the repercussions on

civil law of value judgments embodied in fundamental rights have been

sufficiently taken into account.  It examines whether the civil

courts' decisions are founded on a basically incorrect view of the

range and impact of the fundamental rights invoked and whether the

result of the decision violates such a right.

 

146.    The scope of the Federal Constitutional Court's review varies

according to the intensity of the alleged interference with the

fundamental right.  The more enduringly a civil court decision

curtails conditions for free existence and activity which are

protected as fundamental rights, the more thorough will the Federal

Constitutional Court examine whether this is justified under

constitutional law.

 

147.    The present case concerns the interpretation of ordinary law

regarding the construction to be placed on acts "done for the

purpose of competition" and as to whether such acts can also be

carried out by a party who is not directly competitively involved.

It had to be examined whether the Federal Court of Justice had

attached sufficient importance in its decision to the fundamental

right of freedom of the press.  The reasons of the Federal

Constitutional Court's decision of 9 February 1983, in conjunction

with its decision of 15 November 1982, show that this examination

was in fact carried out.

 

148.    In the Government's submission the review by the Convention

Organs cannot go further than that exercised by the Federal

Constitutional Court.

 

149.    Purely competition-related promotional statements do not come

within the scope of Article 10 para. 1 of the Convention irrespective

of the medium used.  A similar publication in the general press could

also be prohibited under unfair competition law if it was made with

the same competitive intent as in the present case.

 

150.    The authors of the Convention and the States which ratified it

adopted Article 10 with a view to the abolition of censorship of any

kind and ensuring free public political debate.  This related to

statements with an artistic, religious, scientific, political and also

politico-economic content.  Statements intended to influence market

competition solely for one's own benefit or for the economic benefit of

others are worlds apart from this.

 

151.    Purely competition-related statements form part of professional,

economic or business activity.  They concern the struggle between

market competitors, the strength of professional positions, economic

interests and potential earnings but not the intellectual or political

debate.  Protection in this domain is given through those basic

rights that serve the freedom of economic activity such as freedom of

occupation and trade.  These rights are not contained in the Convention.

The Contracting States did not want to create human rights in this

area and cannot be subject to control by the Convention organs in this

respect.

 

152.    The Government claim that there is an analogy to the Glasenapp

and Kosiek cases which also concerned measures which, in substance,

belong to the sphere of a fundamental right not protected by the

Convention (i.e. the right of access to public office) and not to the

sphere of Article 10.  In its judgments concerning those cases

(judgments of 28 August 1986, Series A no. 104 and 105) the European

Court of Human Rights made it clear that the gaps existing in the

European Convention, when compared with the Universal Declaration of

Human Rights and the International Covenant on Civil and Political

Rights, have to be acknowledged as such.  Pursuant to the criteria

developed in these judgments, there must be clarification in relation

to expressions of opinion as to whether a measure is aimed at

freedom of opinion in its essence or whether it is a matter which

is deliberately not brought within the ambit of the Convention.

 

153.    The statements prohibited in the present case did not affect

the essence of freedom of opinion as protected by Article 10 para. 1

of the Convention.  These statements served exclusively the interests

of individual market participants and were not expressions of opinion

important to the functioning of a democratic society.  They

constituted an activity in the form of an expression of opinion within

the framework of professional or business activity.  The mere form

chosen, however, cannot bring this activity within the ambit of

Article 10.  The Government therefore submit that the application is

incompatible with the provisions of the Convention.

 

154.    The Government submit that, because of their nature as purely

competition-related expressions of opinion, the statements in question

are at the most covered by the peripheral zone of Article 10 para. 1

where the States enjoy a wide margin of appreciation in imposing

restrictions.

 

155.    The Government claim that all requirements of Article 10

para. 2 are fulfilled and that the restriction is therefore justified

under this provision.

 

156.    Section 1 of the Unfair Competition Act is a sufficiently

precise statutory basis for restricting competition-related

expressions of opinion.  In this respect the Government refer

to the Barthold judgment (Eur.  Court H.R. judgment of 25 March 1985,

Series A no. 90, paras. 44-49).

 

157.    The Government admit that Section 1 is worded in broad terms,

but observe that this is unavoidable having regard to the many forms

and changing pattern of competitive behaviour.  Broad clauses

referring to honest practices also exist in the legislation of other

States and in Article 10 bis of the Paris Convention on the Protection

of Industrial Property.  On the basis of these texts the courts have

developed a systematic competition law which is no less reliable than

a statute couched in narrower and more concrete terms.  It allows

everybody to adjust his conduct to the requirements of fair

competition.

 

158.    Insofar as the second and third statements of the applicants

are concerned, the Government submit that the legal basis for their

restriction may additionally be seen in Section 824 of the Civil

Code.  This provision was applied by the Regional Court and the

Federal Court of Justice left open whether or not it was in fact

applicable as it considered that the case could be solved on the basis

of Section 1 of the Unfair Competition Act.  This does not mean that

Section 824 was not applicable as well.  It is not the reasons but the

operative part of the judgments which is relevant in this respect.

Unlike the Court of Appeal, the Federal Court in fact confirmed the

Regional Court's decision concerning statements (ii) and (iii) without

calling the Regional Court's legal opinion in question.  Also the

Government's expert, Professor Schricker, confirmed that the

prohibition of these statements was justified under Section 824.

This provision is an adequate statutory basis in terms of Article 10

para. 2 of the Convention on which measures for the protection of the

reputation or rights of others can be based.

 

159.    Apart from this purpose the restriction complained of pursued

the following legitimate aims covered by Article 10 para. 2:

 

        - prevention of disorder, which is not limited to

maintenance of external order by the police, but also covers

an order imposed by law on specific social groups, including the

maintenance of free economic competition between the persons

participating in the market;

 

        - protection of morals, a concept which is not

limited to sexual life and which includes commercial morals.

 

160.    In this context the Government deny that the Unfair

Competition Act aims only at protecting the objective order of

competition.  To provide protection for individual market participants

is an aim of at least equal importance.

 

161.    As regards the necessity of the restrictions in question, the

Government claim that a particularly wide margin of appreciation is

vested in Contracting States as far as the specification and

ascertainment of violations of business ethics is concerned.

 

162.    This is so, firstly, because statements made for competition

purposes belong to the less protected periphery of Article 10 para. 1.

 

163.    Secondly, the specific aim of protection of morals implies

a wide margin of appreciation as was recognised in the Handyside

judgment (Eur.  Court H.R. judgment of 7 December 1976, Series A

no. 24).  The State must have a wide scope for regulating commercial

competition also because the Convention does not require a particular

economic system.

 

164.    Finally, it is relevant in this context that the case concerns

litigation between private parties which the State settles by the

intervention of its judiciary.  This is not the same as a direct

interference of a State authority with freedom of expression.  In

the Convention proceedings the State must not be pushed into the role

of a defendant of the interests of the private party concerned.  The

Government observe in this context that the Convention procedure does

not provide for a participation of the opposite party of the private

litigation.

 

165.    The Government finally refer to the duties and responsibilities

which according to Article 10 para. 2 are connected with the exercise

of freedom of expression.  The Unfair Competition Act merely requires

observance of the rules of game which control competition and which

apply to everybody.  The applicants are not only restricted by, but

also enjoy, the protection of unfair competition law.

 

166.    Having regard to all circumstances, the Government therefore

consider the measures taken as necessary in a democratic society and

justified under Article 10 para. 2 of the Convention.

 

167.    This view is also supported by the conclusions of the

Government's expert, Professor Schricker, which may be summarised

as follows:

 

168.    There can be no doubt that the Unfair Competition Act, as

interpreted in the constant case-law of the German courts, is

applicable to the case.  The applicants' publication represented a

profit-making and thus a "business" activity.  It was also made "for

purposes of competition" as it fulfilled both the objective

(likelihood to influence competition) and the subjective requirements

applicable in this respect (competitive intention).

 

169.    The subjective requirement is of special significance where

competition law is applied to press publications.  Press articles lie

in principle outside competition law.  However, where they are

prompted by competitive intention, they come within its scope.

According to the case-law of the Federal Court it is sufficient in

this respect that competitive intention is one of several motives of

the publication which is not entirely overridden by other motives.  In

the expert's view competitive intention was the dominant motive of the

publication in the present case.

 

170.    In the expert's opinion the publication could have been

forbidden not only under Section 1, but - insofar as statements (ii)

and (iii) are concerned - also under Section 14 of the Unfair

Competition Act.   These statements contained in substance a factual

assertion - whose truth had not been proven - that it was part of the

business policy of "Club X" to deliberately suppress requests to take

back goods.  It is irrelevant in this context that the assertion was

made in the form of skillful polemicising or in the form of a

suggestive question.  Such statements can be particularly damaging in

competition.

 

171.    For the same reason, it would also have been justified to

forbid the latter two statements, even if they were made without

competitive interest, under Section 824 of the Civil Code, and this

notwithstanding the presumption in favour of the admissibility of free

speech which applies in this area.

 

172.    The expert then observes that the impact of the Federal

Court's judgment was in any event limited as its implications were in

principle restricted to the "actual form of the injury" (konkrete

Verletzungsform), i.e. only the particular statements referred to in

the judgment or practically synonymous statements could not be

repeated.  Apart from that the applicants were free to deal with the

same topic again, in particular if there were changed circumstances.

 

173.    A comparative study of legal regulations and principles

applied in other Convention States shows that the competition law in

these States also contains broad general clauses, that in similar

circumstances it is also applicable to non-competitors and press

publications, and that false suspicions and generalisations - such as

those contained in the applicants' statements (ii) and (iii) - are

generally considered as unlawful, the concept of disparagement

(dénigrement) being applied in this respect.  This also follows from

Article 10 bis of the Paris Convention for the Protection of

Industrial Property and from the E.E.C. Directive concerning

misleading advertising of 10 September 1984 (Official Journal of

the European Communities 1984, No.  L 250/17).

 

174.    As regards statement (i), German law considers criticism

consonant with the truth as permissible if it is made for a

sufficiently good reason and if it remains in manner and scope within

the limits of necessity.  Otherwise it is in principle improper

within the meaning of Section 1 of the Unfair Competition Act.

 

175.    A comparative assessment of the law of other States concerning

true criticism is difficult because of changing situations.  There are

three groups of countries: those which in principle allow truthful

criticism subject to certain exceptions; those which in principle, but

again subject to certain exceptions, do not allow criticism of other

competitors; and finally those which adopt a middle line.  Since the

1960s, the Federal Republic has moved from the second to the third

group.  This liberalisation movement has led to a considerable

relaxation of comparative advertising.  Thus it is not correct, in the

expert's view, that Germany is today among the strictest prohibition

countries as regards truthful criticism in competition.  The criteria

applied by the Federal Court in the present case are not out of step

with the law in other countries.

 

176.    Turning finally to the assessment of the case under Article 10

of the Convention, the expert considers that it can be left open

whether the statements in question - which, in his view, must be

aligned with a business advertisement or some other competitive

representation - are covered by freedom of expression within the

meaning of Article 10 para. 1, as in any event the requirements of

para. 2 have been met.

 

177.    As to the lawfulness of the restriction, the expert refers to

the existence of broad general clauses in the competition law of other

countries which are absolutely characteristic and correspond to material

necessities in this field.  The same is true regarding the reference

to extra-legal standards.  The general clause is the heart of

competition law.  In the Federal Republic it is being applied in

about 50% of all cases and it is rendered concrete by a finely

differentiated system of judge-made law.

 

178.    As to the legitimate purpose, the expert contests the

applicants' submission that the competition law pursues primarily

general aims.  The protection of the individual rights of competitors

has always been in the foreground.  This is not overridden by the fact

that the general public interest in fairness of competition is an aim

as well.  While it is true that certain claims under the Unfair

Competition Act, including claims under Section 1, can be asserted by

business men or associations who are not direct competitors (Section 13),

other claims are construed as subjective personal rights.  It is

the prevailing view that individual violations falling under Section 1

can be challenged only by the specific person injured.  The present

case falls into this category.  The restriction therefore served the

protection of the reputation and rights of others.

 

179.    In addition, it may also be brought under the "protection of

morals" clause.  The concept of "honest practices" implies both legal

and ethical evaluative criteria.  Although the latter are not always

decisive, they still characterise the classic unfair competition cases

of disparagement such as the present case.

 

180.    Finally as regards the necessity in a democratic society, the

expert reaffirms his view that the second and third statements of the

applicants constituted a case of disparagement which, in accordance

with Article 10 bis of the Paris Convention, is generally regarded as

unlawful in the competition law of European countries.  The uttering

of an unjustifiable suspicion on the basis of an inappropriate

generalisation must here be treated as an incorrect allegation of

fact.

 

181.    The situation is less clear regarding the first statement

which concerned true factual allegations.  German law is not alone

in permitting critical allegations of fact and evaluations made for

purposes of competition, even if they are based on true information,

only on condition that there is good reason for criticism and that the

criticism remains within the limits of necessity.  German law here

follows a middle line between more liberal and more restrictive

systems.  In this respect the legislator needs to be left scope for

discretion.

 

182.    Public criticism neutral with respect to competition is

largely permitted.  It is not disproportionate to apply stricter

criteria to competitors and to those who take sides for specific

competitors with a view to protecting the standing and goodwill of

particular enterprises and the play of competition.

 

183.    Also the extension of competition law to certain press

products is not disproportionate.  Competition law would be devoid of

substance if every press publication was removed from its

application.  Formal criteria of demarcation are unsuitable, a

functional demarcation is needed.  German law regards the existence of

a competitive intent as decisive in this respect.  This corresponds

to the law of other European States which is often even more

restrictive.

 

184.    The application of this criterion to the press does not mean

that it always has to be objective and neutral to escape control under

the Unfair Competition Act.  The press enjoys freedom to commit itself

and to express one-sided views whenever the publication is a means of

participation in the intellectual clash of opinions in a question of

essential concern to the general public.  Restrictions of unfair

competition law apply only where the intent is to promote certain

competitors commercially.  In practice such cases are extraordinarily

rare because of the difficulty to prove competitive intent.  The

general presumption is that there is none.  It is for the plaintiff

to prove the contrary.

 

185.    The present case was exceptional because of the declared

wish of the publication to be the instrument of the business interests

of certain competitors.  This represents a new form of press organ to

which the application of the Unfair Competition Act is, in the

expert's view, absolutely beyond question.  The Federal Court also

gave relevant and sufficient reasons for applying the Act, deducing

the competitor's intent of the applicants from a careful analysis of

their overall behaviour.  Furthermore, the Federal Court gave

sufficient reasons why the applicants' criticism exceeded the normal

measure of competitive criticism.  While freedom of expression and

freedom of the press were not explicitly mentioned in the judgment,

the principle of "sufficient reason" for the criticism implied a

weighing of interests in the light of basic rights.

 

186.    In all circumstances the restriction served a "pressing social

need", in particular it was not inappropriate having regard to the

standard applied in other countries and its relatively limited

effect.  The Federal Court's judgment made no greater inroads into

freedom of expression than was absolutely necessary, and thus met the

requirements of Article 10 para. 2 of the Convention.

 

IV.   OPINION OF THE COMMISSION

 

 

A.      Point at issue

 

 

187.    The only point at issue is whether or not the restriction of

the applicants' publication under unfair competition law amounted to

an unjustified interference with their right to freedom of expression

as guaranteed by Article 10 (Art. 10) of the Convention.

 

 

B.      Applicability of Article 10 (Art. 10)

 

 

188.    Article 10 (Art. 10) of the Convention reads as follows:

 

"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 and regardless of

frontiers. ...

 

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, in the interests of national

security, territorial integrity or public safety, for

the prevention of disorder or crime, for the protection

of health or morals, for the protection of the reputation

or rights of others, for preventing the disclosure of

information received in confidence, or for maintaining

the authority and impartiality of the judiciary."

 

189.    The Government argue that the present case does not come

within the scope of Article 10 para. 1 (Art. 10-1) because the statements of the

applicants which were prohibited as the result of the domestic

proceedings were made for the purposes of competition and had nothing

to do with expression of opinion in the context of an intellectual or

political debate.  The Government consider that the Commission is

bound by the domestic courts' findings according to which the

statements in question must be qualified as acts of competition.

 

190.    The applicants reject this argument, claiming in particular that the

existence of an act of competition is not a fact established by the

domestic courts but a legal appreciation of the facts for the purposes

of the domestic law which does not bind the Commission.

 

191.    The Commission agrees with the applicants' submission that

it cannot be bound by the domestic qualification of the statements

concerned as acts of competition in the sense that they would

fall outside the scope of Article 10 para. 1 (Art. 10-1) of the Convention.

 

192.    Of course the Commission must have regard to the domestic

decisions as the starting point of its examination of the issue under

the Convention.  In this context it must take into account, as a fact

before it, that the domestic courts qualified the applicants'

statements as acts of competition to which the restrictions under

the Unfair Competition Act were applicable.

 

193.    However, even if, as a result of the domestic proceedings, it

would have to be regarded as an established fact that the statements

were made with the intention to influence competition, it does not

necessarily follow from this that the statements are as such outside

the scope of freedom of expression as defined in Article 10 para. 1 (Art. 10-1).

 

194.    The Government claim that acts of competition belong by their

nature to the sphere of those fundamental rights which protect the

freedom of economic activity such as freedom of occupation and

trade.  The Government further claim that the deliberate exclusion

of these rights from the Convention must be reflected in the

interpretation of the scope of Article 10 (Art. 10), and they invoke the

Glasenapp and Kosiek judgments in this respect (Eur.  Court H.R.,

judgments of 28 August 1986, Series A nos. 104 and 105).

 

195.    However, the present case can be distinguished from the

Glasenapp and Kosiek cases.  It does not concern sanctions for

the expression of an opinion in a legal sphere which is not

within the scope of the Convention and was deliberately excluded

therefrom.  It concerns a direct interference with certain statements

claimed to be made in the exercise of freedom of expression.

 

196.    Even if acts of competition fall primarily within the sphere

of the above-mentioned economic rights which are not included in the

Convention, this does not mean that they are in all instances outside

the ambit of freedom of expression.  Even German domestic law does not

draw such a conclusion.  Thus, for example, the present case was

examined by the Federal Constitutional Court in the light of Article 5

of the Basic Law, i.e. the constitutional provision on freedom of

expression and freedom of the press.

 

197.    The Commission stated in the Barthold case (Comm.  Report

13 July 1983, para. 61):

 

        "The fact that an interference with somebody's

freedom of expression is based on grounds relating to

his particular professional status does in no way

remove the matter as such from the ambit of freedom of

expression and transform it into a matter of exclusive

concern for that person's professional rights."

 

198.    The same considerations also apply, mutatis mutandis, in the

present case which, like the Barthold case, relates to an extended

application of unfair competition law.

 

199.    The Commission notes in this context that the domestic courts

referred to the applicants' firm as a press company which had no

direct competitive relationship with the criticised firm.  It further

notes that the application of the Unfair Competition Act was based on

the applicants' intention to promote the competitiveness of other

businesses to the detriment of the criticised firm, an intention which

was presumed to exist because of the likelihood that the publication

might interfere with competition.

 

200.    In these circumstances it can hardly be maintained that

the publication in question was by its very nature necessarily and

exclusively an act of competition which had nothing to do with freedom

of expression.

 

201.    Freedom of expression under Article 10 para. 1 (Art. 10-1) of the

Convention is an autonomous concept whose meaning is not necessarily

in all details the same as its counterpart in domestic law.  It clearly

covers publications of any kind which convey an opinion or information.

 

202.    While it is true that one of the fundamental functions of

freedom of expression in a democratic society is the discussion of

matters of general public interest, this is by no means the only area

to which it applies.  A democratic society must leave it to the

publishers to determine what matters are of sufficient interest to

merit publication.  The Commission therefore rejects the Government's argument

according to which the scope of Article 10 para. 1 (Art. 10-1) is limited to

statements with an artistic, religious, scientific, political and

politico-economic content which are part of an ongoing intellectual debate.

The Commission is not required to express an opinion on the question to what

extent "purely competition-related promotional statements" are covered by

Article 10 (Art. 10), since the publication at issue in the present case does

not fall into this category (cf. in this respect, No. 7805/77, X and Church of

Scientology v.  Sweden, Dec. 5.5.1979, D.R. 16 p. 68).  It rather concerns

information on specific business practices of interest to specialised retail

traders.

 

203.    The articulation of particular interests, including economic interests,

cannot be a reason for excluding a publication from the scope of freedom of

expression.  The democratic process is dependent on the interplay of a wide

variety of group interests and the articulation of economic interests is

important in this context.  The publications of trade unions, professional

associations and various other formal or informal interest groups are thus

protected by freedom of expression in the same way as the independent press.

 

204.    The Commission therefore finds that Article 10 (Art. 10) is applicable

to the present case since the applicants' publication constituted an exercise

of freedom of expression within the meaning of that provision.

 

 

C.      The scope of interference with the applicants' freedom of expression

 

205.    The competent German courts prohibited the repetition of the statements

contained in the applicants' publication on the ground that they infringed

Section 1 of the Unfair Competition Act.  There has thus been a direct

interference with the applicants' freedom of expression in the form of a

restriction imposed on them.

 

206.    As regards the scope of this interference, the Commission notes that it

relates to all three aspects of the right guaranteed by Article 10 para. 1

(Art. 10-1):

 

a.      there has been an interference with the applicants' right to impart

information because they were prevented from reporting a particular incident

which had occurred to a customer of a certain firm.  The applicants emphasise,

in particular, that the facts reported were true and that this has also been

recognised by the German courts.

 

b.      there has been an interference with the applicants' right to impart

ideas because they were prevented from expressing an opinion on the above

incident.  They were forbidden to raise the question whether this incident

constituted part of the commercial practice of the firm concerned and to

suggest that further steps should be taken if there were several incidents of

this kind.

 

c.      there has been an interference with the applicants' right to receive

information because they were forbidden to invite readers to supply further

information on the practices of the firm in question.  The applicants stress in

this context that the publication was not addressed to the customers of that

firm but to specialised retailers.

 

 

D.      The justification of the interference with the applicants'

freedom of expression under Article 10 para. 2 (Art. 10-2 of the Convention

 

207.    In order to be compatible with the requirements of Article 10 para. 2

(Art. 10-2) of the Convention, any restriction on freedom of expression must -

 

        a) be prescribed by law,

 

        b) pursue one of the legitimate purposes            enumerated in this

provision, and

 

        c) be necessary in a democratic society having            regard to the

duties and responsibilities which            the exercise of this freedom

carries with it.

 

208.    The Commission will deal in turn with each of these elements as they

present themselves in the applicants' case.

 

a.      The lawfulness of the restriction

 

209.    The applicants were restrained from repeating the statements contained

in their publication as a consequence of proceedings taken against them in the

civil courts by a company.  The legal basis of the restriction was Section 1 of

the Unfair Competition Act.

 

210.    The Government claim that at least insofar as the second and third

statements are concerned Section 824 of the Civil Code provided an additional

basis for the restriction.  This provision had been applied by the Regional

Court whose decision the Federal Court of Justice upheld.  However, the Federal

Court decision did not address Section 824.  In any event the Federal Court

held that Section 1 of the Unfair Competition Act provided a sufficient legal

basis for restricting the applicants' publication.

 

211.    The Commission cannot in these circumstances examine whether there was

any additional basis under German law for the restriction in question.  In its

final decision the Federal Court based itself exclusively on Section 1 of the

Unfair Competition Act.  It follows that this must also be the basis for the

Commission's examination.

 

212.    The applicants claim that the restriction imposed on them cannot be

regarded as being "prescribed by law" because Section 1 of the Unfair

Competition Act lacks any reasonable degree of precision, in particular, as

regards its scope of applicability and the notion of "honest practices".

 

213.    The Government submit that it was necessary to base the legislation

concerning unfair competition on broad general clauses because of the constant

change in the forms of competition and their complexity.  They further refer to

the very voluminous body of case-law which has developed the broad concepts of

the Act and has shaped them in a sufficiently precise manner to satisfy the

requirements of Article 10 para. 2 (Art. 10-2) of the Convention.  Finally they

rely on the Barthold judgment of 25 March 1985 (Eur.  Court H.R., Series A no.

90) which recognised Section 1 of the Unfair Competition Act as providing a

sufficient legal basis for restrictions on freedom of expression.

 

214.    The Commission notes that the legal situation in the present case is

somewhat different from the Barthold case in which Section 1 of the Unfair

Competition Act was applied in conjunction with more specific professional

rules.  In the present case Section 1 was applied directly and in isolation.

 

215.    The following statements of the Court are nevertheless relevant to the

present case:

 

        "Section 1 of the 1909 Act does indeed employ somewhat imprecise

wording, notably the expression 'honest practices'.  It thereby confers a broad

discretion on the courts.  The Court has, however, already had the occasion to

recognise the impossibility of obtaining absolute precision in the framing of

laws (see ...  Sunday Times judgment, Series A no. 30, p. 31, para. 49; ...

Silver and Others judgment, Series A no. 61, p. 33, para. 88).  Such

considerations are especially cogent in the sphere of conduct governed by the

1909 Act, namely competition, this being a subject where the relevant factors

are in constant evolution in line with developments in the market and in means

of communication." (Para. 47 of the above-mentioned Barthold judgment).

 

216.    Paragraph 49 of the Sunday Times judgment to which the Court here

refers reads as follows:

 

        "The following are two of the requirements that flow from the

expression 'prescribed by law'.  Firstly the law must be adequately accessible:

the citizen must be able to have an indication that is adequate in the

circumstances of the legal rules applicable to a given case.  Secondly, a law

cannot be regarded as a 'law' unless it is formulated with sufficient precision

to enable the citizen to regulate his conduct: he must be able - if need be

with appropriate advice - to foresee, to a degree that is reasonable in the

circumstances, the consequences which a given action may entail. Those

consequences need not be foreseeable with absolute certainty: experience shows

this to be unattainable.  Again, whilst certainty is highly desirable, it may

bring in its train excessive rigidity and the law must be able to keep pace

with changing circumstances.  Accordingly, many laws are inevitably couched in

terms which, to a greater or lesser extent, are vague and whose interpretation

and application are questions of practice."

 

217.    Since judicial precedent is relied upon by the Government as an

additional source of law which added the required precision to the statutory

texts, it is relevant to refer also to the further dictum in the Sunday Times

judgment according to which the word "law" in the expression "prescribed by

law" covers not only statute but also unwritten law (ibidem para. 47).  The

Commission regards this consideration as valid not only in respect of the

common law, but also in respect of other legal systems where the legislation

deliberately leaves room for judicial precedent.  Accordingly the judicial

principles established by precedent must be regarded as "law" within the

meaning of Article 10 para. 2 (Art. 10-2), provided that they are adhered to by

the courts in a consistent manner.

 

218.    The Commission notes that there exists a very important body of

case-law interpreting Section 1 of the Unfair Competition Act. In the

Commission's view both the scope of applicability of this provision and its

substantive content have been developed with sufficient precision so as to make

the applicable law reasonably foreseeable for the applicants.

 

219.    The Commission therefore finds that the restriction imposed on the

applicants in the present case was "prescribed by law" within the meaning of

Article 10 para 2 (Art. 10-2).

 

b.      The purpose of the restriction

 

220.    The Government argue that the restriction of the applicants'

publication served the prevention of disorder, the protection of morals and the

protection of the reputation and rights of others. The applicants claim that in

reality the Unfair Competition Act serves primarily the purpose of upholding

the principle of competition as such and thus none of the purposes covered by

the Convention.

 

221.    It must be recalled that in the Barthold case both the Commission

(Comm.  Report 13.7.1983, para. 71) and the Court (para. 51 of the

above-mentioned judgment) concluded that Section 1 of the Unfair Competition

Act aimed at protecting the rights of others, and this despite the fact that in

that case the measure taken under Section 1 had been requested by an

association and the protected persons had not been identified individually.

In the present case where the applicants criticised a particular firm and were

sued by that firm it is all the more justified to regard the measure as aiming

at the protection of the rights of others.

 

222.    This approach also takes into account that the restriction imposed on

the applicants was the consequence of litigation with a third party who is not

represented before the Commission.

 

223.    The Commission does not consider it necessary to examine whether the

restriction complained of could be justified on other grounds under Article 10

para. 2 (Art. 10-2).

 

c.      The necessity of the restriction in a democratic society

 

224.    The Government's submissions in this context relate to a large extent

to the justification of the unfair competition law as such. The applicants do

not contest the necessity of special legislation which subjects commercial

publications of competitors in the market to stricter limitations than other

forms of expression.  They question, however, the necessity of restrictions on

factually correct press publications which deal in a critical way with the

commercial practices of specific firms and which are not advertisements in the

ordinary sense.

 

225.    The Commission is not required to deal with this problem in a general

and abstract manner, but only insofar as the facts in the particular case are

concerned.  In doing so, the Commission must have regard to the essential

function of freedom of the press in a democratic society (cf.  Eur.  Court H.R.

Lingens judgment of 8 July 1986, Series A no. 103, p. 26, para. 41).  The

Commission must establish whether a "pressing social need" justified the

restriction, taking into account that the States have a certain margin of

appreciation which goes hand in hand with a European supervision (ibid. p. 25,

para. 39).

 

226.    It is in this context that the characteristics of the applicants'

activities in general and the nature of the particular publication are of

relevance.

 

227.    The applicants claim that they belong to the independent press.  The

Government deny this, claiming that the applicants' firm is rather a kind of

professional organisation or servicing enterprise promoting the interests of

small businesses.  The inference to be drawn from the Government's argument

seems to be that because of the nature of its activities "Markt Intern" must be

assimilated to a competitor in the market of specialised retailers.

 

228.    The Commission considers that the application of Article 10 (Art. 10)

cannot be restricted to the independent press (cf. para. 202 above). It also

protects publications which favour particular political or social groups or

which promote specific interests.  It has been recognised in the domestic

proceedings that the applicants' firm is a publishing company which has no

direct competitive relationship with the aggrieved company.  Their character as

a member of the press is not excluded by the fact that in their publications

the applicants openly promote particular group interests of small business and

specialised retailers.

 

229.    The press character of the particular publication restricted by the

injunction is obvious.  It is immaterial in this context that the matrices from

which the bulletins are printed are prepared in typescript.  Nor is it relevant

that the publication is addressed to a particular target group.  In principle

it is also available to other interested persons outside the group.  In any

event it is not an internal communication within an organised group or

association.

 

230.    The relevant article was of an editorial nature.  It was not a

commercial advertisement or other publicity.  Nor was it solicited by the

specialised retailers whose particular interests it was found to promote.  Its

promotional character was inferred from the applicants' intention to defend the

interest of specialised retailers. However, it has not been argued that there

was anything in the publication itself which could be represented as a

statement to promote specific sales.

 

231.    In these circumstances the Commission considers that the principle

according to which the test of "necessity" in the second paragraph of Article

10 (Art. 10) can be less strict when applied to commercial advertising is

inapplicable (cf.  No. 7805/77, X and Church of Scientology v.  Sweden, loc.

cit.).

 

232.    Insofar as the Government rely on the concept of "morals", the

Commission cannot find that regulations restricting press publications of the

kind in question can be justified with reference to the concept of morals as

developed in the Handyside case (cf.  Eur.  Court H.R., judgment of 7 December

1976, Series A no. 24, para. 48).

 

233.    The applicants place particular emphasis on the fact that the

prohibited statements were true.  The Commission notes that indeed the Federal

Court of Justice recognised that the statements, insofar as they contained

allegations of a factual nature, were true.

 

234.    The Commission is of the opinion that, in general, the restriction of

true statements requires the application of a stricter test of necessity than

the restriction of false or misleading allegations.  This is recognised in the

Unfair Competition Act itself which contains special provisions in respect of

the latter.

 

235.    The Commission recognises that the truth of information cannot be the

only criterion for being allowed to publish it (cf. No. 8803/79, Lingens and

Leitgeb v.  Austria, Dec. 11.12.81, D.R. 26 p. 171).  True statements can

interfere with legitimate interests which deserve an equal degree of protection

as freedom of expression, e.g. where the sphere of privacy or the honour and

reputation of a person is at issue or where legal obligations of

confidentiality have been breached.

 

236.    However, such reasons have not been invoked in the present case.  It is

difficult to see how the factual assertions contained in the applicants'

publication could fall at all within a category of cases where the restriction

of true statements is justified.  It must not be overlooked in this context

that the competitors of the company which was criticised and consumers have a

legitimate interest in being informed of the commercial practices of this firm.

 

237.    The Commission recalls that the statements restricted were the

following:

 

        (i)    the statement that Mrs.  L had sent an angry report saying that

she had returned a beauty set without being reimbursed despite her reminder;

 

        (ii)   the statement that the Club denied knowing anything of the set

returned by Mrs.  L or of her reminder;

 

        (iii)  the question to all chemists / beauty-store colleagues whether

they had similar experiences with the Club as Mrs.  L, whether they knew of

similar cases, and the statement that it was very important for judging the

policy of the Club whether there were one or more incidents of this kind.

 

238.    The Commission further recalls that the Federal Court expressly

confirmed the correctness of the factual assertions in statement (i) (cf. para.

42 above).  Statement (ii) was described as a "mere extension" of statement (i)

which had to be judged by the "same legal standard" (cf. para. 45 above).  As

regards statement (iii), it was expressly left open whether it constituted a

statement of fact or a value judgment (cf. para. 46 above).

 

239.    In these circumstances it cannot be said that the Federal Court

considered statements (ii) and (iii) as being factually incorrect.  It is true,

however, that apart from providing factual information, these statements

contained other elements as well (cf. para. 206 b) and c) above).

 

240.    In their submissions, the Government have sought to justify the

restriction imposed on the applicants on the ground that their statements, in

particular statements (ii) and (iii), were misleading or that they were

disparaging.  The Commission notes, however, that neither Section 3 nor Section

14 of the Unfair Competition Act was applied to the case.  Section 3 concerning

misleading statements was not even invoked by the plaintiff firm and Section 14

concerning disparagement was not applied by the Federal Court of Justice

although the plaintiff firm had invoked it.  Its application would have been

incompatible with the Federal Court's finding that the applicants' statements

were true.

 

241.    The Federal Court of Justice based the restriction on the consideration

that there were not sufficient reasons ("hinreichender Anlass") to report the

facts, even if they were true, and to express a far-reaching suspicion on the

basis of these facts.

 

242.    As regards this suspicion, it was seen to be expressed on the one hand

by the choice of inadequate wording reinforcing an already unfavourable

impression created by the reported facts (the phrase "denied knowing anything"

in statement (ii)) and on the other hand by an unwarranted generalisation based

on an isolated incident and the putting of suggestive questions in relation

thereto (statement (iii)).

 

243.    The Commission observes, however, that the assertion that the plaintiff

"Club X" had "denied knowing anything" was factually correct. The critical

undertone in the wording chosen - the corresponding German term "will [nichts]

wissen" implies that the denial might have been made against better knowledge -

was due to the particular facts. It is to be noted that the German courts

themselves entertained doubts whether the plaintiff firm's denial of having

received the customer's mail was correct.  The applicants' statement in this

respect was not restricted because it was untenable as such, but only because

in the Federal Court's view there was not sufficient reason to make it.

 

244.    The Commission recalls its opinion in the Lingens case that "the use of

strong wording may itself be a means of expressing disapproval of a particular

behaviour and should be restricted only where the terms used are incommensurate

to the legitimate object of the intended criticism" (No. 9815/82, Lingens v.

Austria, Comm. Report, 11.10.1984, para. 81).  In the light of the above

analysis, the Commission finds that the wording of statement (ii) was not

incommensurate to the intended criticism, and therefore could not in itself

provide a reasonable basis for restricting that statement.

 

245.    As regards the reproach of making an unwarranted generalisation, in

particular, by framing an allegedly suggestive question in statement (iii), the

Commission notes that, on its face, the applicants' article left open both the

possibility that the reported case might be an isolated incident as well as the

possibility that it reflected a more general business practice.  The declared

aim of the article was to find out whether or not the latter was the case.

However, the sincerity of the applicants in this respect was called into doubt

because of the assumption that they were acting as competitors whose only

motivation was to harm the commercial interests of the business they

criticised.

 

246.    Such a motivation was inferred by the Federal Court first of all from

earlier press reports of the applicants concerning the criticised firm.  These

had, inter alia, referred to the use of "false data and promises" by that firm

(cf. para. 40 above).

 

247.    However, even if, in the context of German law, the persistent critical

reporting on the affairs of a business might be considered as indicative of a

competitive intention on the part of the publisher, it nevertheless does not

allow any immediate conclusions to be drawn as to the justification of the

restriction of these publications.  This must rather be examined in each case

having regard to the specific content of the publication in question.

 

248.    In the present case the assumption of a competitive intention not only

had the effect of bringing the applicants' article within the scope of the

Unfair Competition Act despite its character as a press publication.  Also, it

led to their being treated in exactly the same manner as if they were

competitors in the relevant branch of business. It was apparently for this

reason that the expressions and the open-ended question in statement (iii) were

not taken at face value but were regarded as a skillful and suggestive device

to express a suspicion concerning the firm's business practices in general.

 

249.    It appears that the decisive criterion for restricting the publication

was the very fact that it was capable of interfering with the competitiveness

of the plaintiff company in relation to specialised retailers whose interests

the applicants defended.  The Federal Court of Justice did not consider that

there was sufficient reason for the making of a statement which was likely to

interfere with competition.

 

250.    The Federal Constitutional Court's decision does not affect this

analysis even if it is assumed that it actually involved a weighing of the

conflicting interests of freedom of expression and the commercial interests

protected by the Unfair Competition Act.  In substance the decision is based on

a reasoning which removes the protection of freedom of expression, irrespective

of the particular circumstances of the case, from any publication which the

competent civil courts have found to be acts of competition within the meaning

of the Unfair Competition Act.

 

251.    The Commission cannot find that such an approach is necessary in the

circumstances of the present case, even if the press organ concerned promoted

specific business interests.  This approach failed to take into account the

difference which exists between advertising by competitors on the one hand and

information imparted by the press on the other.  The Commission considers that

a pressing social need has not been shown to justify the restriction of the

statement in question and it cannot find proportionate the interference with a

press publication by assimilating it to advertising of competitors without

weighing the specific and severe result for freedom of press.

 

252.    In conclusion the Commission therefore finds that the interference with

the applicant's freedom of expression cannot be regarded as "necessary in a

democratic society" within the meaning of Article 10 para. 2 (Art. 10-2) of the

Convention.

 

 

E.      Conclusion

 

 

253.    The Commission concludes by twelve votes to one that there has been a

violation of Article 10 (Art. 10) of the Convention.

 

 

 

 

Secretary to the Commission             President of the Commission

 

 

 

 

    (H. C. KRÜGER)                           (C. A. NØRGAARD)

 

 

&_APPENDIX I&S

 

 

HISTORY OF PROCEEDINGS

 

 

 

 

Date                            Item

 

______________________________________________________________________

 

 

11 July 1983                    Introduction of the application

 

15 September 1983               Registration of the application

 

Examination of admissibility

 

5 July 1984                     Commission's deliberations and

                                decision to invite the Government to

                                submit observations on the

                                admissibility and merits of the

                                application

 

19 November 1984                President grants extension of

                                time-limit to the Government

 

9 March 1985                    Commission refuses to grant a

                                further extension of the time-limit

 

27 March 1985                   Government's observations

 

30 April 1985                   Applicants' observations in reply

 

17 May 1985                     Commission's deliberations and

                                decision to hold an oral hearing

 

21 January 1986                 Oral hearing on admissibility and

                                merits, Commission's deliberations

                                and decision to declare the

                                application admissible

 

7 March 1986                    Commission approves text of decision

                                on admissibility

 

Examination of the merits

 

9 May 1986                      Decision on admissibility transmitted

                                to the parties

 

23 June 1986                    Applicants' observations on the merits

 

16 July 1986                    President grants extension of

                                time-limit to the Government

 

7 October 1986                  Government's observations on the merits

 

 

Date                            Item

 

______________________________________________________________________

 

 

11 October 1986                 Commission's consideration of state of

                                proceedings, decision to invite parties'

                                further observations on the merits

 

5 December 1986                 Applicants' further observations

                                on the merits

 

7 March 1987      )             Commission's consideration of the

                  )             state of proceedings

11 July 1987      )

 

8, 17 & 18 December 1987        Commission's deliberations on the

                                merits, final vote and adoption of

                                the Report

 

 

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