Introduction

The world of influencers has developed into a billion-dollar market, but until now it has hardly been recognized how many influencers fall under the protective regulations for commercial agents.

While companies are spending millions for influencer marketing, German distribution law is lagging behind modern platforms. The same seems to apply in other member states. The rules for commercial agents are harmonised by a directive, so that similar results can be expected in all other member states. To avoid potential pitfalls, save costs and ensure a smooth influencer marketing process, companies and influencers need to understand commercial agency law.

Influencers are remunerated in different ways. Today, we focus on those remuneration models where the influencer receives a commission for all transactions brokered, for example, using their individual discount code provided in their advertising units or tracking users that follow tap tags. This means that influencers not only promote the company's brand generally, but can also be legally credited with promoting specific product purchases by their followers. Avoiding the application of strict protective provisions of commercial agency law when drafting such an influencer contract is not always easy.

The influencer - a commercial agent?

Under what conditions do influencers fall under commercial agency law? According to Section 84 (1) of the German Commercial Code (HGB) and also under Art. 1 para. 1 of the Council Directive 86/653/EEC on self-employed commercial agents (Commercial Agency Directive), a commercial agent is an intermediary who is self-employed and has continuing authority to negotiate the sale or the purchase of goods on behalf of another person (the principal).

Self-employment

An influencer - in contrast to an employee - is considered self-employed in accordance with Section 84 para. 1 HGB if they work for several companies, decide independently on their working hours and location and significantly shape the content of their activities. These factors do not all have to apply, the overall picture is decisive. The influencer will usually be self-employed.

Duty to distribute

An influencer is only considered a commercial agent pursuant to Section 84 para. 1 HGB and under the Commercial Agency Directive if they are contractually obliged - and not just entitled - to broker or conclude specific transactions. This assignment may be limited in time, for example for a season or a campaign. The decisive factor is that the influencer has to have an obligation to seek an indefinite number of business referrals. This characteristic distinguishes influencers from brokers and affiliate marketing, where only a right to commission is regularly agreed in the event of success, but no obligation to take action. If the influencer is obliged to undertake specific advertising measures or a certain minimum number of posts, a sales obligation is therefore regularly assumed.

Procuring of specific contracts

The characteristic of “procuring specific contracts” is where things get interesting. This requires actively influencing interested parties, in this case followers, in order to bring about concrete business transactions. This goes beyond general advertising for the company's brand and incentives to buy. Any instructions already intended for the influencer must also be taken into account here, as these may cast the subsequent execution of the contract in a different light. Transactions are broadly defined under German law and can include goods, services or work performances - in contrast, the Commercial Agency Directive only applies to procuring sales contracts. The influencer's intermediary activity focuses on preparing the conclusion of the transaction, while the actual transaction takes place between the customer and the entrepreneur. The decisive factor is whether a connection to specific products and specific customer orders can be established. In this case, the boundary to general advertising of the brand is crossed, which does not in itself establish the status of a commercial agent. There is a fluid transition here, particularly in internet sales.

The overall impression of the influencer's activities is decisive. Advertising without a direct contractual relationship between the influencer and the advertising company does not constitute business brokerage. On the other hand, posts with discount codes can be regarded as procuring specific transactions. The same applies for tap tags that divert the followers to the webshop of the principal. If according to the influencer contract the success is evaluated based on actual sales to followers of the influencer, this stresses the evaluation: The influencer is then contractually obliged to procure specific contracts.

The assessment is based on a comprehensive analysis of all circumstances of the individual case, whereby the tasks of the influencer, the nature of their content and the structure of the remuneration are relevant. A remuneration model that tracks specific business transactions using discount codes strongly suggests that specific business transactions are being brokered.

Management agencies of influencers are not commercial agents

To date, there have been no rulings in Germany specifically addressing whether and when influencers should be classified as commercial agents. However, in a related matter, the Regional Court of Hamburg, in its judgment of July 27, 2023 (322 O 386/22), determined that an influencer's agency does not qualify as a commercial agent for the influencer.

In this case, the plaintiff, an influencer, terminated an agency agreement with the defendant management agency and demanded the release of withheld income. In response, the defendant counterclaimed for the indemnity of a commercial agent under Section 89b HGB, along with an accounting of transactions with existing customers.

The court ruled against the defendant, stating that the management agency could not be considered a commercial agent. The decision was based on the fact that the defendant represented a large number of influencers, which deviates from the typical profile of a commercial agent. Moreover, the rights and obligations outlined in the contract significantly exceeded those usually associated with commercial agents.

Additionally, the plaintiff was bound by extensive obligations that went beyond the standard duties of a principal, including joint cost calculations, concept creation, further development of the company’s presentation, and participation in no-budget productions.

Another key factor against classifying the defendant as a commercial agent was their contractual obligation to accept fees from customers. This dual role aligns more closely with that of a broker, further distancing the agency from being classified as a commercial agent.

Landmark Ruling by the Tribunale di Roma

The "Tribunale di Roma" recently issued a ruling (No. 2615/24 on March 4, 2024) that qualified several influencers of a principal as commercial agents. The court determined that an influencer can be considered a commercial agent if they regularly and continuously perform sales-promotional activities on behalf of a company. In this case, the influencer's influence on his and her followers was tracked via links and codes and the commission was calculated according to sales success. The followers used the influencer's discount codes to purchase the company's products. This ruling is significant as it clarifies the influencer's role in commercial representation and its implications for social security contributions und Italian law. The court's decision highlights the importance of a continuous relationship and success-based remuneration in determining the status of a commercial agent. This judgment is pivotal for defining the influencer's role within commercial law and may influence similar evaluations in other jurisdictions. This ruling sets a significant precedent, though similar judgments are still awaited in other EU countries, including Germany.

Protective provisions and alternative solutions

If the influencer is classified as a commercial agent based on the aforementioned criteria, the entrepreneur will face specific obligations, including payment risks and minimum notice periods. Notably, the influencer may be entitled to an indemnity equivalent to the average annual remuneration at the end of the contract. Additionally, the commercial agent can request an account statement at any time, without needing a specific reason, to verify their commission payments — an administrative burden for many principals. While this may not be in the principal's best interest, it gives the influencer a strong negotiating position when ending the collaboration or renewing contracts.

However, the strict provisions of commercial agency law may be excluded under certain conditions — such as when the influencer's activities are secondary, their time commitment is minimal, their compensation is lower than their other income, and they do not work as a commercial agent full-time (including for other companies). These exclusions must be explicitly outlined in the contract.

Here are some ideas to consider for managing influencer contracts and navigating commercial agency regulations:

• Clearly define in the contract whether the influencer has any sales obligations. An influencer's role is only excluded from commercial agency regulations if they are not required to perform any sales-related activities. Ambiguous terms regarding voluntary participation might not prevent agency classification if actual practice suggests a binding relationship.
• Ensure the contract specifies whether the influencer is involved in direct business facilitation or merely general promotion. If the influencer uses affiliate links or engages in activities that directly influence consumer purchasing decisions, they may be classified as a commercial agent.
• To avoid agency classification, consider offering a fixed fee rather than commission-based pay. Commission structures, which vary based on sales performance, are a strong indicator of a commercial agent relationship. A fixed fee, especially if not tied to sales outcomes, can help indicate a service relationship rather than an agency one.
• Consider designating influencers as part-time commercial agents, if applicable. Part-time (“secondary” in terms of Art. 2 para. 2 Commercial Agency Directive) agents are generally exempt from certain protections under commercial agency law, such as extended notice periods or indemnity rights. Ensure the contract explicitly states the part-time nature to avoid full agency obligations.
• Ensure compliance with local regulations, as rules for part-time (“secondary”) agents vary across jurisdictions. For example, German law provides specific provisions for part-time agents under § 92b HGB, while other EU countries have similar or differing rules, because the Directive leaves it open to member states to exclude these agents from commercial agency law.
• For influencers who establish their own brands or operate as independent entrepreneurs, distinguish between their main business and any part-time agency roles. Clearly defining their primary business versus their role as an agent can help manage legal and contractual expectations.

By carefully considering these aspects in contract drafting, principals can better manage influencer relationships and navigate the complexities of commercial agency law.

In any case, the legal risks associated with influencer contracts are significant. However, they can be managed effectively, making it highly advisable to have such contracts reviewed by a lawyer before signing. (LG Hamburg, judgment of July 27, 2023 - 322 O 386/22)