Internet law: Legal structure of the search engine optimisation contract (SEO contract)

Due to the growing economic importance of the Internet, many agencies have emerged in recent years that deal mainly or exclusively with the area of search engine optimisation.

Search engine optimisation (SEO) is a sub-area of search engine marketing. As part of search engine optimisation, specialised service providers try to place the web address ("URL") of their customers as high up as possible in the relevant search results of the respective search engines. The aim of this placement is to better market and thus sell the products or services of the respective customers.

The placement of the respective websites in the search engine results is carried out by search engine algorithms. The search engine algorithms have therefore been programmed to rank the pages registered with the respective search engine ("indexed pages") according to their relevance depending on the search terms ("keywords") entered.

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Through their work, search engine optimisers try to increase the relevance of their customers' websites in the eyes of these search engine algorithms. However, as the respective search engine algorithms of Google & Co. are among the best-kept secrets in the industry, search engine optimisation can only be carried out by means of so-called "reverse engineering".

This means that the search results for certain search terms and the structure and linking of the top-ranked (and lower-ranked) websites are used to draw conclusions about the procedures and evaluation principles of the respective search algorithms.

In order to then apply these evaluation results to the customer's respective website, the SEO service provider has access to on-site and off-site optimisation measures in particular.

On-site optimisation includes optimally populating the relevant pages with the search terms that are important to the customer or making changes and correcting errors in the source code of the respective page, etc.

Off-site optimisation includes backlink building in particular. This means that the SEO service provider links the customer's website to as many other pages as possible. In the eyes of search engine algorithms, these backlinks fulfil the function of recommendations, meaning that many backlinks from the best and most relevant sites possible can noticeably increase the ranking of the customer's website.

From this description of how SEO service providers work, it is clear that this service is associated with many uncertainties and risks, especially for the SEO service provider. In almost every conversation with search engine optimisers, it is therefore always pointed out that although every effort is made to deliver the desired result, no guarantee of success can be given.

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Due to these imponderables, every SEO service provider must therefore protect itself legally in order to avoid being held liable for damages in the event of poor placement of the customer's website.

I. Structure of the SEO contract as a service contract (Section 611 BGB) or as a contract for work (Section 631 BGB)

The SEO contract can be structured as a service contract or a contract for work.

The distinction between a contract for work and a contract for services is simple, at least in theory: In the case of a service contract, the activity as such is owed, whereas in the case of a contract for work, a specific result is owed.

For the SEO service provider, structuring the respective contract or GTCs as a service contract will therefore generally be the more attractive option, as the service provider then only owes the optimisation measures and not the placement as such. If the optimisation measures do not lead to the desired success, the customer is still obliged to pay the agreed fee. The claim to remuneration would therefore only be forfeited if the customer could raise the defence of non-performance of the contract, meaning that the SEO service provider's service would be completely unusable.

However, if the service provider promises to place the customer's website in the top ten search results for certain search terms, the contract will generally be regarded as a contract for work. If these results are not achieved, the customer would therefore not be obliged to pay the agreed remuneration.

This was also the view of the Düsseldorf Local Court in its judgement of 17.07.2008 (Ref.: 39 C 5988/08).

After taking evidence, the court came to the conclusion that an employee of the plaintiff (SEO company) had made specific promises to the defendant (customer) that the defendant's website would be found in the top ten results when certain search terms were entered.

As this was not achieved, the defendant was entitled to terminate the contract for cause and was entitled to reclaim the advances already paid by the plaintiff.

The court also considered the plaintiff's argument that such a placement could not be guaranteed due to technical imponderables to be irrelevant, as the employee's assurance promised exactly that.

Due to the risks mentioned, SEO service providers should therefore ensure that all employees are instructed not to make any promises to the customer that go beyond the contract, in addition to drafting the contract correctly.

II. Individual contracts or general terms and conditions (GTC)

In principle, every service provider with a certain volume of business is recommended to use general terms and conditions. Although general terms and conditions are not required by law, they are useful for standardising the service provider's contractual relationships with all customers.

Business transactions are simplified, discrepancies and the resulting legal proceedings are avoided.

However, it should be noted that ineffective GTC clauses can be anti-competitive. Since the EU Directive (UCP Directive on Unfair Commercial Practices) of 12 June 2007, the use of GTCs constitutes an act of competition within the meaning of the UWG, meaning that competitors can now take action against their use under competition law.

General terms and conditions should therefore not simply be copied from a competitor, but should be well prepared.

In addition, general terms and conditions must be adapted to the constantly changing case law, as otherwise liability risks may also arise.

III Description of the scope of services

Regardless of whether the GTCs or the individual contracts are structured as a service contract or a contract for work, they should always contain as precise a description as possible of the SEO service provider's scope of services.

The honest SEO service provider benefits from this approach, as this is the only way to prove retrospectively that the service provider has at least tried everything to place the customer's website as high up as possible.

This benefits the customer, as the precise service description brings a little more transparency to the somewhat "blurred" work of the service provider (even if checking the activities of the SEO service provider will remain almost impossible for most customers).

IV. Black Hat SEO vs. competition law

SEO service providers are often inclined to facilitate their work with so-called black hat methods.

Black hat SEO refers to SEO methods and SEO service providers that are not in line with the guidelines set by the search engines (e.g. Google guidelines for webmasters).

Techniques such as keyword stuffing, cloaking or doorway paging are then used.

If the SEO service provider uses these methods, this can basically have two consequences.

On the one hand, these measures may be unfair within the meaning of the Unfair Competition Act (UWG) (at least if they deliberately mislead visitors to the website).

On the other hand, the use of these methods can lead to the customer's website being downgraded in the search engine rankings or even banned from the search engine index altogether. In this case, the customer could again be entitled to make claims for poor performance.

Black-hat methods should be expressly excluded in the contract/terms and conditions for the benefit of both the customer and the SEO service provider. In positive terms, the respective guidelines of the search engine operators should be expressly recognised as relevant.

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Important Note: The content of this article has been prepared to the best of our knowledge and belief. However, due to the complexity and constant evolution of the subject matter, we must exclude liability and warranty. Important Notice: The content of this article has been created to the best of our knowledge and understanding. However, due to the complexity and constant changes in the subject matter, we must exclude any liability and warranty.

If you need legal advice, feel free to call us at 0221 – 80187670 or email us at info@mth-partner.de.

Lawyers from Cologne advise you nationwide on Internet law.

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