Definition and legal classification of the term “Weighted”
The term “Weighted” originates from English and is used in numerous legal contexts to describe an evaluation, classification, or attribution based on specific weighting factors. It is particularly applied in contract law, corporate law, data protection law, tax law, as well as in international trade agreements. In German law, “Weighted” is not a technical term, but it is increasingly used in official translations and EU regulations, for example as part of terms such as “Weighted Average” or “Weighted Voting Rights”.
Definition of Terms
In a legal context, “Weighted” generally describes a method in which individual elements, rights, or obligations are assigned different weights, which subsequently influence calculations, allocations, or decisions. This is done based on predefined criteria, usually for the purpose of providing a proper and differentiated evaluation.
Fields of application for “Weighted” in law
Corporate Law
Weighted Voting Systems
In corporate law, “Weighted” usually refers to the weighting of voting rights, so-called “Weighted Voting.” Here, the voting rights of shareholders or members are not distributed equally, but weighted according to specific quotas. For example, in companies with multiple classes of shares, holders of privileged shares may receive a higher voting right per share. This weighting is regularly recognized both in national corporate law and across borders through EU legal acts, provided that transparency and equal treatment in accordance with the relevant corporate law requirements are maintained.
Legal framework conditions
In German law, the structuring of Weighted Voting is subject to the German Stock Corporation Act (AktG) and the Limited Liability Companies Act (GmbHG). For example, weighting can be agreed in the articles of association of a company, but must not contravene mandatory corporate law principles such as capital maintenance or minority protection. Violations may lead to partial nullity of shareholder resolutions or to actions for annulment.
Data protection law and data governance
Weighted Assessment
In data protection law, “Weighted” can occur in connection with data protection impact assessments (DPIA). Here, risks and protective measures are evaluated based on weighted criteria. For example, the General Data Protection Regulation (GDPR) provides that measures may be prioritized and assessed using weighting factors according to their level of risk (“Weighted Risk Assessment”). The specific design is at the discretion of those responsible but must be documented and proven in case of dispute.
Tax Law
Weighted Average Cost Method
In tax law, the term commonly appears in connection with the “Weighted Average Cost Method,” a method for valuing inventories where average costs are calculated based on quantity and price. According to German accounting principles, the use of this method is permitted provided it is transparently documented for both commercial and tax purposes (§ 256 Sentence 1 HGB, § 6 EStG).
Antitrust law and public procurement
Weighted Criteria in awarding contracts
In public procurement law (procurement procedures under GWB and VgV), the use of “Weighted Criteria” for contract awards is firmly established. Bidders are evaluated according to previously announced, differently weighted criteria such as price, quality, sustainability, or delivery time. The weighting must be transparent and non-discriminatory. Violations of these rules may lead to a review by procurement boards and annulment of the award decision.
International dimensions of “Weighted”
International trade agreements
International trade and investment agreements frequently include regulations concerning voting weight (Weighted Voting) as well as the weighting of obligations or advantages (Weighted Advantages). Such regulations serve to reconcile divergent interests and ensure proportional influence of the contracting parties.
EU Law
Within the European Union, “Weighted” is used, for example, in the Council of the European Union with the “weighted majority voting” (Qualified Majority Voting). The weighting of the votes of member states is determined by fixed criteria such as population and economic strength, and is bindingly regulated in the EU treaties.
Legal consequences and disputes in the case of faulty weighting (“Weighted-Errors”)
Defective or non-transparent weighting can have significant legal consequences. In corporate law, faulty weighted voting rules typically lead to actions for annulment; in antitrust law, to the annulment of award decisions. In accounting law, an incorrect application of the Weighted Average method can result in tax demands or corrections to the accounts. In such cases, documenting the weighting standards and their application within company-internal control systems (ICS) is legally required.
Summary and outlook
The term “Weighted” describes a wide range of weighted mechanisms of attribution, evaluation, and decision-making in law. Its legal impact ranges from corporate governance and co-determination to data protection and tax law, and extends to international directives and agreements. For legally secure application, it is essential to observe the relevant statutory norms, transparency, and complete documentation. European and international practice show an increasing use of weighted evaluation methods (“Weighted Approaches”), indicating that their legal analysis will gain further significance in the future.
Frequently Asked Questions
Is the use of weighted methods permitted in court proceedings?
The use of weighted methods, i.e., weighted procedures for the evaluation of evidence or decision-making, is not explicitly regulated under German law, but it is subject to the general principles of the free judicial assessment of evidence according to § 286 of the Code of Civil Procedure (ZPO). This means that courts may assign different weights to individual pieces of evidence, provided they do so transparently and with traceable justification. However, the use of mathematically formalized weighting models must always meet the constitutional requirements of the right to be heard (Art. 103(1) GG) and the prohibition of arbitrariness (Art. 3(1) GG). A purely schematic application of weighted methods may therefore be inadmissible if it fails to take the circumstances of the individual case into account or prevents a thorough individual assessment.
Are there specific regulations for conducting weighted risk analyses in data protection law?
Under the General Data Protection Regulation (GDPR), so-called risk analyses are required, for example through data protection impact assessments (Art. 35 GDPR). The method used to weight risks is not conclusively prescribed. However, there are guidelines, such as those from the Article 29 Working Party or the European Data Protection Board, which recommend carrying out a traceable and documented risk weighting. Any weighting procedures must comply with the transparency obligations of Art. 5 GDPR and should provide an objective, traceable documentation of the criteria and their weight. Arbitrary weighting and the disadvantaging of certain groups are explicitly excluded.
What liability risks do companies face with faulty use of weighted algorithms?
Companies that use weighted algorithms bear full responsibility for their correct functioning under German and European law (see § 823 BGB, Art. 32 GDPR). Errors in the design, implementation, or calibration of these algorithms may result in both civil and public law liability. Potential areas of liability include, for example, product liability in automated systems, data protection violations, as well as breaches of the General Act on Equal Treatment (AGG), if improper weighting leads to discrimination. Companies are required to regularly review, document, and audit their weighted procedures for risks associated with legal requirements.
How are weighted models legally classified in public procurement?
In public procurement law, the use of weighted methods – for example, to evaluate offers – is expressly provided for (§ 127 GWB, § 58 VgV). The weighting of award criteria must be determined in advance, made transparent, and documented in a way that is verifiable for all bidders. Unauthorized subsequent changes to the weighting or undisclosed criteria regularly render the entire procurement procedure unlawful. Furthermore, the equal treatment requirement (Art. 3 GG, § 97(2) GWB) demands that weightings be designed in a non-discriminatory and comprehensible manner.
What legal requirements exist for the traceability and transparency of weighted procedures in automated decisions?
Automated decision procedures that use weighted models are subject to various transparency requirements. In particular, under Art. 22 GDPR, data subjects have the right to receive intelligible information about the logic, significance, and consequences of the applied weightings. In administrative procedures, the principle of traceability and verifiability of the decision is also a mandatory prerequisite (§ 39 VwVfG). If the disclosure of weighting factors and their application is lacking, both the decision and the underlying weighted procedure may be unlawful and may be overturned in complaint or appeal proceedings.
How is compliance with the prohibition of discrimination monitored in weighted methods?
Weighted methods must not violate the prohibition of discrimination under Art. 3 GG, the AGG, or special statutory equality provisions. This is ensured by supervisory authorities (e.g., the Federal Anti-Discrimination Agency, Data Protection Authorities) as well as by judicial review. Especially for automated procedures, it must be demonstrated that the weightings do not adversely affect certain groups either directly or indirectly. Companies and authorities must regularly conduct audits and impact assessments in order to detect and prevent potential discrimination risks at an early stage. If such controls are lacking, sanctions or the invalidity of the evaluations performed may result.
