Reed Smith Client Alerts

2022 is a year of major changes to consumer protection laws in Germany and the EU. Following changes to contractual rights in connection with digital products in January 2021 (see Part I of our client alert series), new consumer protection rules regarding automatic renewal and notice periods entered into force on 1 March 2022. In addition, requirements regarding termination button(s) will come into force on 1 July 2022.

What the new rules say and how to implement them

Automatic renewal: maximum term is one month

The most important change in March 2022 are limitations to automatic renewal in general terms and conditions (GTCs) in consumer agreements covering recurring delivery of goods or provision of services or works (Recurring Agreements) – see new section 309 no. 9 lit. b and c of the German Civil Code (Bürgerliches Gesetzbuch – BGB).

Under the new rules, automatic renewal of a contract will only be effective if:

  1. the term of the Recurring Agreement is indefinite (i.e., there is no fixed term); and
  2. the Recurring Agreement can be terminated at any time by the consumer giving one month’s notice.

If a fixed term is agreed, the maximum duration is two years (section 309 no. 9 lit. 1 BGB). Any notice period under a Recurring Agreement must not be longer than one month before the end of the agreement (section 309 no. 9 lit. c BGB).

This applies to Recurring Agreements that are concluded on or after 1 March 2022. The new rules do not apply to Recurring Agreements concluded before 1 March 2022, and businesses do not have to switch to the new rules.

Implementation of the requirements for automatic renewal, term and termination

Many organizations will have to change their B2C GTCs with respect to automatic renewal, term and termination. For example, the following is permitted: fixed terms of up to two years with a one-month notice period plus automatic renewal of the term after expiry of the two years with the consumer having the right to terminate it at any time by giving one month’s notice.

Termination button to make termination easy

Compared to the rules applicable to all GTCs, the scope of the rules regarding the termination button(s) is limited as follows: the new rules apply only to consumer agreements for a service against payment (section 310 (3) BGB) in electronic commerce (Sec. 312i (1) BGB) that provide for a continuing obligation.

The organization must:

  1. Enable the consumer to:
  • to terminate the agreement by means of a so-called termination button (see below for the concrete design of this termination button);
  • to provide information about
    • the type of termination;
    • in the case of termination in exceptional circumstances, the reason for termination;
    • clear identifiability of the consumer and the relevant agreement;
    • the date of contract termination given in the termination notice, as well as details of the immediate electronic transmission of the confirmation of termination to him/her
  • save the submitted termination notice, together with the date and time of submission, on a permanent data carrier.
  1. Immediately confirm  by electronic means (e.g., email) the contents, and date and time of receipt, of the termination notice and the date and time at which the agreement is to be terminated by the termination in text form by electronic means (e.g. e-mail).

The amendments to section 312k BGB (termination button) come into force on 1 July 2022. The regulations of the new section 312k BGB will then also apply to agreements concluded before this date (new article 229, section 60 sentence 3 German Introductory Act to the Civil Code (EGBGB).