Germany: Two years of Cancellation Buttons–Status Quo and New Developments
Since the enactment of the Fair Consumer Contracts Act in 2022, which mandated the inclusion of a cancellation button for evergreen agreements on websites in Germany (also known as the "2-click cancellation law”), there has been a lot of attention by German Consumer Protection Associations (CPA) and a notable impact on businesses. Within just a month of the law coming into force, German courts began issuing preliminary injunctions against arguably allegedly non-compliant websites. In 2023, CPA launched an industry-wide campaign to alert and warn about the absence or obscurity of these cancellation buttons. According to a CPA website, 20 percent of websites still fail to meet the requirements under German law.
Most recently, higher courts have published the first decisions on the cancellation button, setting precedents for compliance with the German law. However, most of them apply a very strict standard, which seems to disregard today’s consumers capabilities to cancel online as well as the impact on businesses. In light of this development, this article aims at providing a quick update on the specifics (under A.). Meanwhile, somewhat "button” related, the EU has rolled out a new mandatory withdrawal function for B2C distance contracts under EU Directive 2023/2673, which the article will also briefly cover (under B.).
A. Update on the German "2-click cancellation law”
1. Legal requirements
Whenever consumers can conclude subscriptions against payment on a website, businesses should also allow consumers to terminate the subscription within "2 clicks”. The requirements can be summarized:
- 1st click on Cancellation button: The website must include a prominently, permanently available and immediately and easily accessible button labeled "Cancel contracts here" or other unambiguous wording.
- 2nd click on detail page and "Cancel now” button: The cancellation button must lead directly to a form page where (i) the respective consumer is identified and (ii) can effectively submit the cancellation request by clicking on a button labeled "Cancel now". Following that, (iii) the consumer must receive an electronic confirmation of the submission.
2. Overview of recent German case law on this statutory requirement
Against this background, the recent rulings regarding the 2-click cancellation law can be categorized as follows:
No additional exceptions to cancellation button requirement
- The obligation to provide a cancellation button also applies for subscriptions such as for cooking boxes, alcohol, newspapers, or computer software according to the Regional Court of Berlin (decision of 16 March 2023 - 52 O 333/22). Exceptions as set out for such contracts under EU consumer protection law do not apply except for cancellations with strict formal requirements such as termination of employment contracts and financial services.
Cancellation button specifics
- Easy to read: The cancellation button must not be written smaller than the text on the website and sufficient contrast is required. Cancellations must be as easy as the conclusion of a contract, according to the court (Regional Court Munich I, decision of 16 November 2023 - 12 O 4127/23). However, the court seems to apply a stricter threshold than for links to the privacy notice or terms and conditions which are also usually provided in a smaller font in the footer of a website and approved by courts. It is highly questionable whether the cancellation button that was criticized by the court is not "easy to read”.
- Direct and easy access: Surprisingly, in contrast to the "2-click away rule” as established by leading German case law for imprints does not apply. The court determined that the cancellation button must not be hidden under a large number of other links (Regional Court Munich I, decision of 16 November 2023 - 12 O 4127/23).
- Two-step cancellation procedure: After clicking on the cancellation button, the customer must be forwarded directly to the confirmation page in order to complete the cancellation process by clicking on the "Cancel now” button. In contrast to that, a three-step cancellation process does not align with the German legislator's intention to make termination as simple as possible (Higher Regional Court Düsseldorf, decision of 23 May 2024 - 20 UKl 3/23).
Design of the cancellation page
- Other elements permitted on the cancellation form page: Elements on the confirmation page that refer to a "hotline", "offers" or "Sorry to see you go” (i.e. double checking nudges) are generally permitted provided that the confirmation page is easily accessible. Since consumers assumingly pay more attention during a cancellation process because of the respective importance, the court determines that consumers are less likely to be distracted from the actual cancellation process by nudges (Regional Court Frankfurt, decision of 30 August 2023 - 2-06 O 411/22).
Authentication
- No excessive authentication requirements: To prevent fraudulent activities, it may be permissible and even necessary to ask consumers for confirmation after they have submitted their cancellation request for authentication purposes. This generally includes details about first name, surname, e-mail address, customer contract number. Whether additional information may be asked depends on the respective service and can only be answered on a case-by-case basis. Courts consider further information or confirmation of cancellation by telephone usually as a limit and thus an infringement of the law (Regional Court Koblenz, decision of February 27, 2024 - 11 O 12/23).
- No password request: According to the court, if a cancellation process depends on a password, it creates a hurdle that will likely prevent a consumer from cancelling. Consumers may not always have access to their password (Regional Court Cologne, decision of 29 July 2022 - 33 O 355/22). However, this is questionable as it seems that the court did not reasonably consider that consumers can usually easily reset their passwords. Hence, it could be argued that it is easy and market standard for consumers to enter their password, and this should not qualify as a "hurdle” for consumers. However, until we have further case law in this regard, the issue remains a grey area.
Permissible cancellation alternatives
- Additional cancellation options permitted: Businesses are not restricted from providing alternative cancellation options such as cancellation assistants as long as consumers do not assume that they must use them (Regional Court Koblenz, decision of 7 March, 2023 - 11 O 21/22).
Third party reseller
- Additional responsibilities for resellers: Resellers who offer subscriptions of the actual providers of the subscription must also ensure a cancellation button is also present on the provider's website, not just their own. This follows the court ruling, which dictates that resellers are accountable for ensuring compliance with this requirement, effectively treating the provider's website as an extension of their own sales platform (Regional Court Hildesheim, decision of 9 January 2024 – 3 O 109/23). The court attributes breaches of duty by the provider to the reseller, which is not at all laid down in the law. Apparently, customers will have to be provided with two cancellation buttons in such reseller situations. The appeal against this ruling is pending appeal at the Higher Regional Court Celle - 13 U 7/24. Hopefully the second instance will provide further clarity.
3. Scope of the law under scrutiny
Amidst ongoing debates, the term "website” for cancellation button requirements remains legally ambiguous. Some advocate a broad, technology-neutral interpretation that encompasses apps, but German case law has yet to clarify. Arguments persist for limiting the scope to traditional websites accessed through desktop and mobile browsers. Given this uncertainty and recent case law from the Higher Regional Court of Düsseldorf (OLG Düsseldorf, decision of 8 February 2024 – 20 Ukl 4/23) — though not definitively addressing whether apps are included—we advise a tailored risk assessment for each business model. It is noteworthy that consumer protection agencies are beginning to scrutinize apps, expanding their vigilance beyond conventional websites.
4. Enforcement and consequences
In case of non-compliance with the requirements above,
- consumers may freely terminate their subscriptions without being bound by minimum terms or termination notice periods and
- businesses are exposed to warning letters and cease-and-desist claims (C&D) by CPAs and competitors, potentially followed by litigation if deciding to not sign the C&D.
B. Upcoming EU-wide withdrawal function
In addition to the "2-click cancellation law” in Germany and the "3-click cancellation law” in France, EU legislators followed up with a similar solution for exercising the withdrawal right. From 19 June 2026, EU member states require a withdrawal function for distance contracts concluded by the means of an online interface (Art. 11a EU Directive 2023/2673). In a nutshell, businesses must comply with the following:
- implement a right-of-withdrawal function like the cancellation button above and
- implement a process to automatically confirm transmission and receipt of the declaration of withdrawal, including the time stamp.
So far, there is no clarity regarding the design of the function, how to prevent fraudulent activities or to enable partial withdrawals. Hence, this leaves businesses room for creativity and leeway to argue against any potential enforcement actions.