Cease & Desist Letter Abuse

At a Glance

In Germany, a company can send a competitor a cease and desist letter if they feel the competitor is not complying with German laws. Unfortunately, this rule is sometimes abused and smaller enterprises pay the price.

  • Some parties abuse the rule just to collect a fee
  • Small companies waste time and money responding to C&D letters
  • A 2013 law update introduced a cap on the total value allowed on claims
  • Case law will show if this change is sufficient

Issue in Detail

eBay was founded on the belief of fair and open competition. In Germany, competition law states that a company can send a competitor a cease and desist letter when the company feels that the competitor is not complying with German laws. eBay fully supports this rule.

Unfortunately, this rule is sometimes abused. Cease and desist letters are sometimes sent out by parties who have no actual interest in competitive activities, but are instead attempting only to collect a fee. It can be both expensive and time consuming for smaller enterprises to respond to these cease and desist letters, sometimes having a detrimental effect on the business of the cease and desist letter receiver. eBay is strongly against this sort of frivolous, harmful activity.

eBay has long been a proponent of finding a solution to this costly issue. In 2013, competition law changed with the aim to tackle the problem of "Cease & Desist Letter Abuse." The law introduced a cap on the total value of these sorts of claims and a counter-claim for the cease and desist letter receiver. Case law will show if this change is sufficient. However, in a recent survey (March 2015) still 43.3% of the asked online merchants called policy makers for effective measures against Cease and Desist Letter Abuse.