New "button solution" has been in effect since August 1st - here's what you need to do now!

As of August 1st, the new button directive, which was passed by the Bundestag and Bundesrat back in March, is causing uncertainty among shop operators. Is the next wave of cease-and-desist letters looming because operators of small shops, in particular, aren't familiar with the new requirements and unknowingly violate them? Anyone who hasn't addressed this yet should familiarize themselves with the new regulation and implement the necessary elements as soon as possible. Read here what you need to consider to be on the safe side.

Why was the new button solution introduced?

The new button law is intended for consumer protection and aims to prevent users from unknowingly entering into chargeable contracts without being fully informed about the terms (keyword: subscription traps). Unscrupulous providers lure customers with an order button that promises free products or services, while hidden costs lurk in the fine print like the terms and conditions. The button solution is meant to put an end to such deceptive tactics.

However, the new regulations also affect a large portion of legitimate online shops, which now have to think about order structures and order buttons. In summary, there are two main points:

1. Order buttons must clearly indicate that the process incurs costs.

2. The order overview must list all important information such as product features or characteristics of the service, any minimum term, as well as total costs including taxes and additional costs such as shipping fees.

The new requirements can be found in the German Civil Code (BGB), Book 2, Section 3, Title 1, Subtitle 2 under § 312g "Duties in electronic commerce". It states, among other things:(2) In an electronic contract between a business and a consumer involving a chargeable service by the business, the business must provide the consumer with the information according to Article 246 § 1 Paragraph 1 Number 4 first half-sentence and Number 5, 7, and 8 of the Introductory Act to the Civil Code, clearly and prominently before the consumer places the order. This obligation does not apply to contracts for the financial services mentioned in § 312b Paragraph 1 Sentence 2.(3) The business must design the order situation for a contract according to Paragraph 2 Sentence 1 so that the consumer expressly confirms with their order that they are committed to a payment. If the order is placed via a button, the business's obligation from Sentence 1 is only fulfilled if this button is clearly labeled with nothing other than the words "order subject to payment" or a corresponding clear phrase.

A similar EU directive has been announced.

Who are the new requirements for?

All online providers based in Germany or with customers in Germany must adhere to the button solution. Primarily, of course, online shops are affected by the new regulation. However, products do not have to be purchased; the new law also applies to online or offline services ordered online. Providers of tools and software, hosting services, or websites where a paid membership can be acquired must also implement the changes. In simplified terms, it affects everything purchased commercially and costs money. It involves all purchase contracts concluded on the internet or via mobile (e.g., via app). Contracts concluded via email are not affected by the new regulation.

To Do: Label order buttons

The new button regulation precisely dictates how order buttons must be labeled as of August 1, 2012. The button must contain the terms “buy,” “with costs,” or “subject to payment” to make it clear to the customer that the process will incur a cost. The customer must be aware that clicking the button concludes a chargeable contract.

Examples of what is allowed:

• Buy

• Order with costs

• Order subject to payment

• Conclude a payable contract

Examples of what is not allowed:

• Order

• Order now

• Continue

• Go

• OK

• Become a Premium member

• Complete order

• Submit order

While the law does not explicitly mandate a button, alternatives are not clearly defined either. Moreover, having a button to complete an order process is a common solution. It is important that the text is clearly legible and should not contain any additional text. This rule applies to both classic buttons and text links or form elements.

To Do: Necessary information in the order process

According to Article 246 "Information duties in particular sales forms" § 1 Information duties for distance contracts, the following information must (among other things) be displayed on the order page:

• The key features of the goods or services and information on how the contract is concluded

• The minimum contract term, if it involves a continuous or regularly recurring service

• The total price of the goods or services including all related components and all taxes collected by the business, or, if no exact price can be stated, the calculation basis that enables the consumer to verify the price

• Any additional delivery and shipping costs as well as a notice on any other taxes or costs not charged through the business

Other necessary information includes delivery and billing address, selected payment method, links to terms and conditions, delivery instructions as well as contract duration. It is confusing that so far it is not clear which “essential features” are mandatory. Since the characteristics of goods can vary greatly depending on the product or service, there are currently no specific guidelines. For an item of clothing, these might be color and size; for a service, it might be the extent of the service, or for a membership, the features acquired.

To Do: Layout of the order overview

The new law requires that the ordered goods or services with their features and costs, as well as the order button, must not be spatially separated. Product information must not be placed below the button but should be placed above it. (In the above example from Amazon, this point is, for example, not met.) There should not be any separating elements between them; the customer must recognize that the information (product details, costs, and order button) belong together and should perceive the information about goods and costs before they click the order button.

To Do: Design of the order overview

The required information must not only be listed in the order overview but should also be highlighted, for example, by using a color. It is also required that the font is large enough, easily readable, and offers sufficient contrast. The language should be easy to understand. No information should be hidden.

Special regulations

• The button solution applies only to distance selling, meaning only in the B2C area. Pure B2B contracts are not affected.

• Providers selling their goods through auction platforms or sites like Amazon need not worry. The platform operators are responsible for making their order processes compliant with the law. By the way, the solutions "place bid" or "confirm bid" are permitted here.

• For foreign language customers, the notices must be translated into the respective language. On an English button, for example, "Buy" or "Purchase" should be displayed.

Conclusion: Ignoring the requirements can be costly

Those who do not implement the new regulations may receive cease-and-desist letters. Moreover, all purchases made without complying with the requirements will be considered invalid:

(4) A contract according to Paragraph 2 Sentence 1 only comes into effect if the business fulfills its obligation from Paragraph 3. Therefore, customers do not have to pay for their goods, as the purchase contract is deemed invalid. Even if the changes may be very inconvenient and costly for small companies in particular, the new "button solution" should not be ignored, as it can be expensive for any provider in the long term if they do not promptly address it. To inform and protect especially small and medium-sized shop operators from cease-and-desist letters, the BVDW has published a white paper where all information can be read. If you need support in interpreting and implementing the new button solution, we are happy to assist you with tailored solutions for you and your shop system. Feel free to contact us, and our experts will help you make your offer legally compliant.