Judgment of the Cologne Administrative Court of 17 November 2023 – BNetzA Acted Unlawfully by Naming Company in Press Release

I. Introduction

The German Federal Network Agency (Bundesnetzagentur, BNetzA) is not permitted to publish press releases with details of the fines imposed and the names of the companies concerned. In the view of the Cologne Administrative Court, there is no legal basis that would allow for the public disclosure of the fines imposed in this area in contrast to competition law. The decision is highly relevant in practice as well as for other legal and regulatory areas in which the supervisory authorities are very active in their public relations work, such as data protection.

II. Background

The claimant is engaged in telemarketing and operates several call centres. The defendant is the German Federal Network Agency (the “BNetzA”). The defendant initiated administrative proceedings against the claimant for suspected unauthorised telephone advertising and subsequently issued an administrative notice imposing a fine based on section 130(1) of the German Administrative Offences Act (Ordnungswidrigkeitengesetz, OWiG) and sections 20(1) no. 1 and 7(2) no.2 of the German Unfair Competition Act (Gesetz gegen den unlauteren Wettbewerb, UWG (old version)). Sections 7(1) and 7(2)(2) of the Unfair Competition Act prohibit commercial practices that constitute an unacceptable nuisance to a market participant, which can be assumed to be the case in particular when it comes to unsolicited advertising.

The defendant intended to publish a press release naming the claimant in connection with the imposition of the fine. It justified this by stating that “the fine imposed should not only serve a repressive and admonishing function, but also have a general and specific deterrent effect” (Cologne Administrative Court, GRUR-RS 2023, 34957, para. 5). Besides relying on section 130(1) of the Administrative Offences Act in conjunction with sections 20(1)(1) and 7(2)(2) of the Unfair Competition Act, section 45n(8) of the German Telecommunications Act (Telekommunikationsgesetz, TKG (section 52(7), sent. 1 of the Telecommunications Act, new version)) and section 67(1), sent. 1 of the Telecommunications Act (section 123(1) of the Telecommunications Act, new version), the defendant relied on a 2014 competition law order by the Düsseldorf Higher Regional Court, in which the court had decided that a press release may include a company’s name if the press’s right to information outweighs the company’s interest in confidentiality, which is founded on the right to corporate personality (Düsseldorf Higher Regional Court, NZKart 2015, 57, 58).

The company’s name was published on the BNetzA’s website and Twitter and disseminated through a mailing list to journalists.

Subsequently, the claimant requested the defendant to no avail to delete the press release and to give the claimant an undertaking that it would cease-and-desist from publication. In the claimant’s view, it was entitled to an injunction based on section 1004(1), sent. 2 of the German Civil Code (Bürgerliches Gesetzbuch, BGB) by analogy with section 823(1) of the German Civil Code in conjunction with Article 2(1) of the German Basic Law (Grundgesetz, GG) in conjunction with Articles 1(1), 5 and 12 of the Basic Law in conjunction with Article 19(3) of the Basic Law. The claimant then applied to the Cologne Administrative Court for an interim injunction, but its application was refused (Cologne Administrative Court - 1 L 166/21). On appeal to the Higher Administrative Court of North Rhine Westphalia, the claimant obtained a temporary order prohibiting the defendant from disseminating the press release via its website (Higher Administrative Court of North Rhine Westphalia – 13 B 331/21). In the court’s view, the press release had caused the defendant immense reputational damage that could cost it millions in turnover. The claimant subsequently brought an action before the Cologne Administrative Court.

III. The Cologne Administrative Court’s legal analysis

The Cologne Administrative Court ruled that the claimant was entitled to the injunctive relief sought against the defendant due to the defendant’s unlawful publication of the information about the claimant on the defendant’s website. In the court’s opinion, the very fact of the unlawful publication meant it could be assumed that there was a risk of the offence being repeated, which is what section 1004(1), sent. 2 of the Civil Code requires for the grant of relief (Cologne Administrative Court, GRUR-RS 2023, 34957, para. 33).

The court ruled that the BNetzA had unlawfully encroached on the claimant’s freedom to exercise its occupation in accordance with Article 12(1) of the Basic Law in conjunction with Article 19(3) of the Basic Law. On the other hand, a simultaneous breach of the claimant’s corporate right of personality (Article 2(1) in conjunction with Article 1(1) of the Basic Law) could be excluded.

The court reasoned that section 45n(8), sent. 1 of the Telecommunications Act did not provide a legal basis for the publication in the present case because the publication of information is conditional on “the information provided, such as that in section 45n(1) to (7) of the Telecommunications Act, ensuring that end-users have all the information necessary for choosing a public telecommunications network or a publicly accessible communications service.” (Cologne Administrative Court, GRUR-RS 2023, 34957, para. 52). The court added that the operator of a call centre is neither a public telecommunications network nor a public communications service within the meaning of this provision. Furthermore, publishing offences punishable by a fine is not part of the purpose of section 45n of the Telecommunications Act. The court pointed out that the revised version of section 45n(8), sent. 1 of the Telecommunications Act (section 52(7), sent. 1 of the Telecommunications Act, new version) does not alter the situation either since the wording of the provisions are fundamentally the same.

In the court’s opinion the defendant’s right to issue orders and take measures under section 67(1) sentence 1 of the Telecommunications Act, old version (section 123(1) of the Telecommunications Act, new version) was also not a sufficient legal basis for the press release. The defendant had exercised its discretion incorrectly because the fine imposed justified the expectation that the claimant would refrain from future misconduct. The court stated that if there are indications suggesting that future infringements are likely, the information provided must also relate to this potential misconduct. Alternatively, if there is a concrete risk to consumers, the BNetzA must employ supervisory measures to mitigate this risk.

The court explained that section of 53(5) of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB), which is the basis for competition authorities publishing violations of competition law, cannot be used as a legal basis for publication in the present case because of the interference by the public authorities (in the claimant’s constitutional rights) and the associated requirement that express statutory authorisation is needed to justify such interference. Similarly, the court did not consider section 20(3) of the Unfair Competition Act (old version) a suitable legal basis for publishing the press release on the violation because the press release was part of the public authority’s general public relations work and therefore required its own legal basis.

IV. Conclusion and outlook

The aim of the BNetzA’s publication was to provide information about the fine imposed. Section 123(1) of the Telecommunications Act (section 67(1), sent. 1 of the Telecommunications Act, old version) is in principle a suitable legal basis for issuing public warnings. However, the BNetzA’s publication of the mere occurrence of a violation together with the company’s name was no longer within the provision’s scope of application. It is not possible to expand public authorities’ powers by relying on the legal basis available under competition law in section 53(5) of the Act against Restraints of Competition because the principle of reservation of legislative power requires measures by public authorities that interfere with individual rights to have a legal basis. The decision shows that the supervisory authorities’ approach in practice is not necessarily lawful (“naming and shaming”). For example, although the General Data Protection Regulation contains no express legal basis for this, it is also common practice to publish media-effective fines for data protection violations and to name the controller (Article 58(3)(b) of the General Data Protection Regulation is sometimes used as justification). It should be highlighted that publication of information about violations is not only an interference with fundamental rights that requires justification but can also cause irreparable harm to companies. For these reasons, publication must be subject to the proportionality principle. Otherwise, the supervisory authorities could be hit with hefty damages claims.