Online Gambling

02 September 2004

Jan-Peter Ohrtmann

On April 1 2004 the Federal Court of Justice held that an online magazine is not liable, in an editorial context, for setting hyperlinks to gambling websites. As general guidance this decision now restricts the liability of online magazines (and, indeed, online publishers in general) for hyperlinks. It also indicates that the requirements to obtain a German gambling license are under review.

Facts of the Case

The defendant, an online magazine, had published an article on the Internet about websites that offer gambling and betting services. The article only named the services and provided a hyperlink to the respective websites. The claimant argued that the online magazine was liable for the illegal gambling and betting service because it had supported the service by providing hyperlinks.

The Applicable Rules of German Unfair Competition Law

The Federal Court of Justice rejected this claim (I ZR 317/01). It stated that, as a general rule, the setting of a hyperlink to a website with illegal or unlawful content can constitute an act of unfair competition according the Unfair Competition Act (UWG). For example, websites that offer gambling services to the German market without a German gaming licence constitute illegal content.

The reason for this liability is that the hyperlink can support the provision of illegal or unlawful content. However, liability requires that the supporting party has breached his obligation to check whether he supports unlawful or illegal actions.

Liability for Hyperlinks

For setting or maintaining hyperlinks, the Federal Court of Justice has now established several criteria which show how far a linking party is obliged to check the content behind hyperlinks. These criteria are: (i) the context in which the hyperlink is used (ii) its purpose (iii) the linking party’s knowledge of illegal content and (iv) the possibility of performing an illegal action.

Applying these criteria, the Federal Court of Justice found that an online magazine is not obliged to perform a thorough and in-depth review of the content on the linked website. Apparently (though not explicitly) this finding has been influenced by the constitutional privilege of the press. The Federal Court of Justice ruled that the online magazine had not suggested that users contact the gaming companies nor had it claimed that the content on the linked gambling website was its own. Therefore the online magazine would only have been liable if it knew that online gambling services that are offered to the German market require a German gaming licence.

This case indicates that, in general, the Federal Court of Justice restricts the liability of online magazines for hyperlinks. The reasons described above can also be applied to hyperlinks to other websites with illegal or unlawful content. However online magazines should be aware that they remain liable if they promote illegal or unlawful content or if it is clear to them that the content behind the hyperlink is illegal or unlawful.

Access to the German Online Gambling Market

The decision is also of interest for online gaming providers. Following the “Gambelli” decision of the European Court of Justice of November 6, 2003, the Federal Court of Justice indicated that it regards the German statutes on the licensing of gambling services as a breach of Article 46, 49 EC Treaty. Practically this means that the highest Civil Court in Germany underlined the principle that providers of online gambling services that have a licence of another EC country can establish easier access to the German gaming market. So we consider it as likely that the German gaming market will face some changes in the near future.