On January 10, 2019, Munich Higher Regional Court ruled (Case 29 U 1091/18) in favor of a lawsuit brought by the North Rhine-Westphalia Verbraucherzentrale (consumer protection association) against Amazon EU S.a.r.l. and found the ordering concept of the “Amazon Dash Button” to be unlawful. The harsh verdict against one of the first “smart home” applications is being criticized within the tech sector.
The “Amazon Dash Buttons” are stick-on Wi-Fi connected buttons, allowing customers to reorder everyday products at the touch of a button. Each button is linked to a specific product such as detergent, diapers, or coffee, which is pre-selected upon set-up of the “Dash Button. In its General Terms and Conditions, however, Amazon reserves the right to adjust the price of the product or to supply an alternative product.
This clause in the General Terms and Conditions was considered inadmissible by Munich Higher Regional Court. The court also criticized other aspects of the business model: Amazon would not inform customers about the price and the goods actually ordered prior to placing the order, but would only provide this information in the Amazon app after the contract had been concluded. There would also be no indication that a payment obligation has been triggered when the button is pushed. In the case of contracts for chargeable services with consumers in electronic business transactions, such a notice is obligatory for the button solution, however, pursuant to Section 312j(3) German Civil Code. Overall, the judges found the ordering concept to lack transparency for consumers.
The judgement is not yet final. While the Munich judges did not allow an appeal to the Federal Court of Justice (BGH), Amazon already announced that it would lodge an appeal for non-admission.
The fact that Munich Higher Regional Court rejected the “smart home” device so clearly in the dispute between consumer protection and innovation is partly considered as a step backwards by the innovation-savvy tech sector. Critics of the ruling argue in particular that customers deliberately installed the “Dash Buttons” in awareness of the concept in order to benefit from the simplest and most convenient shopping experience possible. Customers would also have the option of canceling or returning the order to Amazon. The “Dash Button” is regarded as a precursor of “smart home” applications, for whose future legally compliant design the Higher Regional Court ruling therefore definitely needs to be considered and represents a serious hurdle.