Is "advertising with free" misleading when payment is made with data? The referral decision of the Federal Court of Justice (BGH) to the Court of Justice of the European Union (EuGH) is intended to provide a clear clarification.

Under Union law, it has so far been unclear whether the term "costs" also includes the disclosure of data and whether advertising for a service as free is permissible when users pay with data.

The question of whether a digital service may permissibly advertise itself as free even though users must disclose their personal data and consent to commercial use is now a matter for the Court of Justice of the European Union (EuGH).

By decision of 25 September 2025 (Az. I ZR 11/20) the Federal Court of Justice (BGH) decided to suspend proceedings in a dispute between a consumer association and Facebook (Meta Platforms) and to refer the matter to the EuGH for preliminary ruling. The outcome of the proceedings could fundamentally determine whether and when digital "free offers" are actually unfair within the meaning of competition law.

1. Legal background: The limits of advertising with free

Central to the matter is the question of how the term "costs" in No. 20 of Annex I to Directive 2005/29/EC on unfair commercial practices (Unfair Commercial Practices Directive) is to be interpreted.
According to this provision, advertising with terms such as "free", "without charge" or "for nothing" is in any event impermissible if the consumer nonetheless costs must bear.

This provision has been transposed into German law by No. 20 of the Annex to § 3 Abs. 3 UWG ("false advertising as free").
While this provision originally targeted hidden cash payments, in the era of data-driven business models, for which advertising as free is often standard practice, the question arises whether the disclosure of personal data is also to be regarded as a consideration – and thus as "costs".

2. The dispute: "Facebook is and remains free"

In 2015, Facebook used the statement on its homepage:

"Facebook is and remains free."

The Federal Association of Consumer Centres (vzbv) regarded this as misleading commercial conduct (§ 5 UWG).
Reasoning: The use of the platform was in fact not free of charge, because the users provided Facebook with their personal data, which the company for advertising and analytics purposes exploited – that is, with economic value.

Both the Landgericht Berlin and the Kammergericht dismissed the action.
They argued that an average informed consumer would understand the term "free" to mean that he pays no money – but not that no immaterial detriment, such as through data usage, would occur.
In this respect, the statement was not misleading.

3. The referral question of the BGH

The BGH considered this question to be unresolved under EU law and referred it to the EuGH for interpretation.
It wishes to know whether the concept of "costs" within the meaning of No. 20 Annex I in conjunction with Art. 5 (5) of Directive 2005/29/EG also encompasses the disclosure of personal data and the consent to their use for commercial purposes.

According to the Senate's view, there is considerable reason to interpret the concept of costs broadly:

• Teleologically the Directive aims at a high level of consumer protection. "Free" advertising has a significant attracting effect that could lead to deceptions as to the economic value of the consideration.
• Systematically the European contract law also speaks in favour of equating monetary payments with personal data: Thus, Art. 3 (1) sentence 2 of Directive (EU) 2019/770 explicitly provides that a consumer contract also exists when the consumer provides personal data which is processed for purposes other than the performance of the contract, for example for advertising purposes.
• From an economic perspective personal data has a monetary value for undertakings, since it is the basis for targeted advertising and profile building. The transfer of data is thus functionally equated with a payment.

4. National courts hitherto restrictive

The German courts of first and second instance have so far taken a narrow interpretation with regard to advertising with "free":
They did not regard the disclosure of personal data as "costs" within the meaning of the UWG and thus followed a classical concept of assets.
Accordingly, "costs" requires a pecuniary burden{

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• TTerms such as "free" or "complimentary" should only be used if no economically valuable consideration is required in return.
• Review of existing advertising materials:In particular, apps, online platforms and loyalty programmes should be reviewed to ensure that data usage is explained adequately.

7. Conclusion

The BGH has made a crucialreferral to the EuGH a decisivechange of direction for competition law in the digital economy.
The core question is whether"paying with data" will in future be treated asconsideration within the meaning of unfair competition law – and whether consumers can be misled by advertising claimingfree.

The answer of the EuGH will determine how companies may market digital business models in future – and whether the statement"Facebook is and remains free" will soon be deemed legally impermissible.In order to always stay abreast of current case law, we recommend – not only for advertising claims of free – that you have your marketing campaigns reviewed by the experts atAVANTCORE Rechtsanwälte in Stuttgart.Our law firm specialises inData Protection Law andCompetition Law.