Definition and concept of boycott
The term “boycott” refers to the deliberate and usually collectively organized refusal of economic, social, or societal relations with a person, company, state, or institution in order to exert pressure and in particular to influence certain behavior or bring about change. In a legal context, the boycott has special significance, as such measures can have a variety of legal implications and exist in the tension between various legally protected interests such as freedom of contract, competition law, and fundamental rights.
Legal classification of boycott
Distinction from similar terms
The boycott must be distinguished from related phenomena such as strikes, embargoes, or cartel agreements. While the strike typically relates to employment relationships or collective bargaining disputes and the embargo often concerns foreign policy measures between states, the boycott is characterized by its broad applicability and the frequent initiation by private individuals.
Constitutional framework
The right to boycott is generally linked to freedom of expression (Art. 5 GG), freedom of assembly (Art. 8 GG), and freedom of association (Art. 9 GG). However, a boycott can also affect other fundamental rights such as the general right of personality (Art. 2 GG), the right to practice a profession (Art. 12 GG), and the right to property (Art. 14 GG).
Boycott as an exercise of freedom of expression and assembly
In particular, political and social boycotts are often understood as expressions of specific opinions and therefore fall under the protection of freedom of expression. Collective voting on measures within associations or organizations can also be considered an exercise of the freedom of assembly. At the same time, the interests of third parties, for example those affected by boycott measures, must be respected, making comprehensive balancing of interests necessary.
Boycott in civil law
Freedom of contract and boycott
Freedom of contract as a civil law principle generally includes the liberty to enter into or reject contracts. A one-off or individual boycott, which is manifested in the refusal of cooperation, does not usually constitute a legal violation. However, if a boycott is organized collectively, legal problems may arise depending on its purpose and execution.
Boycott as immoral conduct (§ 826 BGB)
A boycott can be deemed immoral and therefore unlawful if it is deliberately aimed at harming another party without legitimate interest. The deciding factor is whether the collective refusal of business relations goes beyond what is legally permissible, especially if unfair means are used or if there is evidence of disproportionate pressure. Consistent case law holds that especially a “call for boycott”—that is, urging third parties to participate in a boycott—can lead to liability for damages if unlawful objectives are pursued.
Defensive rights of those affected
Individuals or companies affected by a boycott can assert civil claims for injunctive relief and damages. Legal bases for these include, among others, the tort provisions (§§ 823 et seq. BGB), competition law, as well as special protective statutes.
Boycott in competition law
Boycott as anti-competitive conduct
In German and European competition law, the boycott is a frequently discussed issue. According to the Act against Restraints of Competition (GWB), especially § 21 GWB, the prohibition of boycotts is centrally regulated.
Core areas of the competition ban
A boycott occurs when businesses collectively exclude a third party by agreeing to no longer do business with them. This is also referred to as a “blocking boycott.” The “procurement boycott” refers to the collective decision to no longer purchase goods or services from a certain supplier.
Boycott prohibition under § 21 GWB
A boycott cartel is prohibited under antitrust law, especially when companies, without objectively justified reason, exclude a third party from supplies or purchases or incite other companies to do so. The law provides for severe sanctions, including fines and the nullity of such agreements.
European regulations
European antitrust law also prohibits, under Art. 101 TFEU (Treaty on the Functioning of the European Union), coordinated practices that aim to or actually prevent, restrict, or distort competition. This includes boycotts by companies.
Permissibility and exceptions
There are exceptions to the prohibition of boycotts, particularly when there is a legitimate interest of the participants or the boycott serves to achieve legitimate objectives. Case-by-case decisions are crucial here.
Boycott in labor law
Industrial actions
A labor boycott is a specific form of industrial action. In this scenario, employees or employers deliberately and purposefully refuse (further) cooperation. The legal assessment is based on labor dispute law and takes into account collective bargaining autonomy.
Limits and lawfulness
Labor boycotts may not exceed the extent legally recognized as permissible industrial action. Unlawful boycott actions can lead to claims for damages.
Boycott in international law
State boycotts and international sanctions
State boycotts concern international legal relations and may be implemented as unilateral or multilateral economic sanctions. These typically take the form of import or export bans, which may be based on resolutions of international organizations such as the United Nations or the European Union.
Legal classification
Such measures exist in the tension between the principle of state sovereignty, international agreements, and trade freedoms. Boycotts under international law are permissible only within the framework of existing international legal order, for example as a sanction for serious breaches of contract or for fulfilling Security Council resolutions.
Boycott in criminal law
Criminally punishable calls for boycott
Criminal law recognizes situations in which calls for or actions of boycott can be legally relevant. Specifically, this concerns cases where boycott actions are accompanied by coercion (§ 240 StGB) or extortion (§ 253 StGB). Calls for boycott against individuals may also be criminally relevant as insult or defamation (§§ 185, 186 StGB).
Criminal liability in the context of economic boycotts
Boycott actions that are accompanied by threats, extortion, or coercion can be prosecuted under the aforementioned criminal offenses. However, mere organization of an economic boycott is generally not a criminal offense, provided no further criminal elements are involved.
Special forms and practical examples
Consumer boycott
A consumer boycott describes the association of private individuals for the purpose of the concerted refusal to purchase goods or services, often with political or ethical motivations. As a rule, this is legally permissible as long as no unfair means are used.
Political boycott
The political boycott is distinguished by its objective: The aim is usually to influence political or societal processes. Such boycotts are often under particular protection of fundamental rights, but are also subject to the legal limits outlined above.
Conclusion
The boycott is a complex legal phenomenon that lies at the intersection between fundamental freedoms, economic freedom of action, and the protection of fair competition. In civil law, competition law, labor law, international law, and criminal law, there are differentiated and complex regulations for boycott measures that require careful examination in each individual case. The assessment of the permissibility of a boycott always requires a comprehensive weighing of the affected interests and the observance of existing legal prohibitions and obligations.
Frequently Asked Questions
Can a boycott be legally classified as an unfair competitive practice?
A boycott can generally be classified under German law as an unfair competitive practice within the meaning of the Act Against Unfair Competition (UWG) if it is specifically aimed at harming a market participant without objectively justified reason. In particular, § 4 No. 4 UWG addresses the targeted obstruction of competitors. A call for a boycott that results in providers or buyers, through collective action, seeking to eliminate a competitor from the market or significantly impair their market opportunities, can be seen as targeted obstruction. The key considerations are the motive and the manner in which the boycott is carried out. For instance, an organized collective boycott explicitly aiming to eliminate a competitor would be considered unfair and thus inadmissible. However, calls for a boycott may also enjoy constitutional protection of freedom of expression under certain conditions, so an individualized balancing of interests is always required.
Under what conditions is a call for boycott protected by the fundamental right to freedom of expression?
The Basic Law protects freedom of expression under Article 5, which also includes the right to call for a boycott. Nevertheless, this fundamental right is not unrestricted. The call for a boycott must be made in a manner that does not excessively harm the rights of third parties. According to the constant case law of the Federal Constitutional Court, a balance must be struck between the freedom of expression of the person calling for the boycott and the affected interests of the party targeted by the boycott. A call for a boycott is protected by the fundamental right when it is limited to the mere expression of opinion and is not driven by a targeted intent to harm or defame. However, if there is targeted economic harm, particularly with a dominant market position, the protection of the economic development of the affected company may take precedence over freedom of expression.
Are collective calls for boycott permissible under antitrust law?
Under German and European antitrust law, collective boycott agreements are generally prohibited. Pursuant to §§ 1, 2 GWB (Act Against Restraints of Competition) and Art. 101 (1) TFEU (Treaty on the Functioning of the European Union), agreements between companies whose object or effect is to restrict competition are forbidden. This also includes cartels appearing as “boycott cartels”—that is, where several companies agree to jointly exclude certain suppliers or customers from the market. Such agreements usually lead to a significant restriction of competition and are therefore void. However, there are exceptions, for example if such a boycott serves to enforce legitimate economic interests and does not exceed what is necessary; these are, however, narrowly limited and strictly applied.
When can a boycott give rise to civil claims for damages?
A boycott can, under certain circumstances, lead to claims for damages. According to §§ 823 para. 1, 826 BGB, in addition to the violation of absolute rights (e.g., of the established and exercised business operation), intentional immoral damage can also be considered. The prerequisite is that the call for boycott or the boycotting behavior is specifically aimed at unfairly harming the affected company and that a specific loss can be proven. Courts particularly examine whether the boycotter exhibited morally or legally reprehensible behavior. If this is the case, the economically harmed party may demand compensation for the damages caused.
What criminal consequences can a boycott entail?
From a criminal perspective, a boycott is generally not prohibited. However, the circumstances under which a boycott is carried out can make certain criminal provisions relevant. For example, § 240 StGB (coercion) could apply if a boycott call is used to exert pressure on third parties, especially if accompanied by violence or threats. An incitement to criminal acts could also be punishable under § 111 StGB if, for example, the call for a boycott is combined with a public call to commit a crime. If a boycott is associated with extortion (§ 253 StGB), further criminal consequences are possible.
Is a politically motivated boycott legally treated differently than a purely economically motivated one?
Legally, the assessment of a boycott also considers its motive. Politically motivated boycotts tend to enjoy broader protection under freedom of expression, particularly when they serve the formation of public opinion and will. Nevertheless, the limits imposed by the UWG as well as the civil and criminal protection of the rights of those affected apply here as well. If a political boycott is used solely to economically injure a specific company for political reasons, and the measure is not proportionate, a politically motivated boycott may also be inadmissible. In each case, a comprehensive weighing of fundamental rights positions must be undertaken.
Can a boycott have implications for labor law?
In labor law, a boycott may be relevant in particular when employees or unions call for collective boycott actions against an employer or the products of a company. Here, collective bargaining and labor law provisions—in particular the right to strike—must be observed. The boundary of legally permissible industrial action is drawn more narrowly than for political boycotts. If there is no concrete connection to collective bargaining negotiations, a call for a boycott of goods or for refusal to work is not automatically covered by the exercise of freedom of association (Art. 9 (3) GG) and can lead to labor law consequences such as warnings or dismissal. In extreme cases, the offense of coercion may also be fulfilled.
