On Tuesday, 19 November, the Regional Court of Berlin ruled against Google in a case brought by the Federation of German Consumer Associations (vzbv).  The vzbv had initiated an action for injunction against Google, requesting it to stop using certain clauses in its Terms of Use and Privacy Policy.  In Germany, consumer associations have a right to bring legal proceedings against companies that engage in commercial practices which are illegal under the Act Against Unfair Competition.

The court sided entirely with the plaintiff and ruled that Google must refrain from using the relevant (and similar) clauses in agreements with consumers in Germany. If Google breaches this prohibition monetary penalties of up to €250,000 or imprisonment of up to six months can be imposed (to be enforced against Google’s legal representatives).

The court’s reasoning is not yet available, but according to press reports the court considered the relevant clauses to be overly vague and broad and to restrict the rights of consumers. The vzbv had argued that users were “unreasonably disadvantaged.”  The court’s press release lists all the relevant clauses which the court considered to be illegal.  We break these down after the jump. 

Google’s Terms of Use – 7 clauses were considered illegal, including provisions concerning:

  • Google’s right to suspend, change or terminate the provision of the service and to examine and remove content;
  • the restriction of Google’s liability; and
  • Google’s right to amend the Terms of Use.

Google’s Privacy Policy (in connection with the opening of a user account) –  14 clauses were considered illegal, including provisions:

  • by which the user consents to the Terms of Use and  acknowledges that he has read the Privacy Policy;
  • setting out which information Google potentially processes, including information about used services and the manner of use, device-specific information (and the possibility to link it to the Google account), location-based information and information stored on users’ devices and the use of the Google-profile name;
  • concerning cookies;
  • referring to the possibility that personal data from different services may be linked;
  • providing that Google may not delete or remove all data from its services and systems;
  • concerning the disclosure of personal data to third parties, including in case of a merger or sale; and
  • reserving the right to change the Privacy Policy.

Google’s Android Marketplace/Google Play Terms of Use – 5 clauses were considered illegal, including provisions:

  • reserving the right to change the Terms of Use or guidelines;
  • reserving the right to remotely remove at Google’s discretion applications from users’ devices;
  • reserving the right to terminate the Marketplace/Google Play at Google’s discretion; and
  • limiting Google’s liability.

The press release does not mention the legal basis for the court’s findings.  However, in a similar ruling against Apple in April of this year, the same court relied on the rules concerning unfair consumer terms and conditions in the German Civil Code.  Pursuant to these rules, consumer terms are invalid if, contrary to the requirement of good faith, they unreasonably disadvantage the consumer.  Such disadvantage may arise from a lack of clarity of a provision and is presumed if a provision is incompatible with essential principles of the statutory provision from which it deviates.  In the April ruling, several provisions in Apple’s privacy statement were held to be unclear and to violate several essential principles set out in the German data protection laws, in particular the provisions on consent in the Federal Data Protection Act, the Tele Media and the Telecommunications Acts.  It is likely that the court relied on similar grounds in the present ruling.

The case demonstrates the risk that not only the provisions in a company’s terms of use, but also in its privacy policy can be subject to court scrutiny and be invalidated.