1. Deployment of influencers
Many companies have realized that they can use platforms such as TikTok, Instagram, YouTube and others to generate awareness for their products or services among customer groups that they would not be able to reach via traditional marketing channels such as TV, radio or print, or only in a rudimentary way. This is where influencers come into play, who – as their name suggests – can influence other people in their (purchasing) behavior. Companies primarily use influencers with a high number of followers, which defines their reach. Conversely, influencers usually increase their own value – also expressed through the number of followers – through this cooperation, especially when well-known brands are involved. Cooperation is therefore fundamentally attractive for both sides. The way in which followers are influenced can be manifold: Influencers can help to increase the perception of a product or service (and therefore often the respective company behind it) in the minds of their followers and, above all, in a positive way. Ideally, however, the influence goes so far that followers feel encouraged to buy the product advertised by the influencer. And it is precisely in this context, namely influencing potential customers (followers of the influencer) in a way that leads or contributes to the conclusion of a purchase contract between the company and the follower, that commercial agency law may become relevant.
2. What characterizes a commercial agent?
A commercial agent is “a self-employed intermediary who has continuing authority to negotiate transactions on behalf of another entrepreneur (the “principal”) or to conclude transactions in the latter’s name. “(Section 84 para. 1 sentence 1 HGB). “A person is self-employed if he is essentially able to arrange his activities freely and to determine his working hours.” (Section 84 para. 1 sentence 1 HGB).
The question of whether and under what conditions an influencer can be a commercial agent depends, in addition to the self-employment assumed here, on whether there is a permanent entrustment, i.e. whether the influencer works for the company not only once, but at least for a certain or determinable period of time. Secondly, the influencer’s activity must consist of brokering business for the company, whereby, according to established case law, it should be sufficient for the assumption of mediation by a commercial agent that the influencer’s contribution is co-causative for the transaction concluded between the entrepreneur and the customer.
3. When is a business transaction intermediated by an influencer?
The distinction between the creation of mere incentives to buy and the activity of an influencer that qualifies as intermediation within the meaning of Section 84 HGB always requires consideration of the overall circumstances and the agreement made between the entrepreneur and the influencer as to how the influencer is to work for the entrepreneur. The agreed remuneration also plays a role. If the following circumstances are present, it is unlikely to be assumed that the influencer is acting as an intermediary:
- The influencer engages in pure product placement in his posts without his followers being able to directly purchase the product in question
- The influencer agrees that an entrepreneur may place advertising for their product where the influencer publishes his/her post (e.g. before the start of a video created by the influencer on YouTube)
- The influencer only publishes his or her own content using platforms such as YouTube or Instagram without being directly and expressly commissioned by them to increase the number of users of the platform.
In contrast, contractual arrangements suggest brokerage or intermediation within the meaning of Section 84 para. 1 sentence 1 HGB if
- The influencer is supposed to use special sales-promoting elements in their posts, such as discount codes or affiliate links, which are not only used to analyze user behavior or to generate or examine traffic, but also directly demonstrate that a purchase is attributable to the use of the discount code or link posted by the influencer
- The influencer’s remuneration is not based on the number of posts or the number of views/followers, but on revenue from the advertised product
- The activity of the influencer is not only aimed at advertising the attractiveness or suitability of a product in accordance with the contractual agreement, but is also intended to bring about a purchase between a follower and the entrepreneur.
The exact distinction may be difficult in individual cases, but ultimately the same principles apply as those developed by case law on commercial agents at a time when there existed neither the internet nor social media, let alone influencers.
When drafting the agreement between the entrepreneur and an influencer, it is important to avoid undesirable legal consequences and to be aware of the possible classification as a commercial agency relationship from the outset. Depending on whether such a relationship is desired by both parties or not, the aspects relevant for this assessment should be regulated so clearly that there is no unpleasant surprise for at least one of the parties at the end of the contractual relationship.