Definition of the Term “New Customer”

Is a customer still a new customer even if he or she has already purchased a different product from the same company?

The European Court of Justice (“ECJ”) has addressed the definition of “new customer” in connection with claims for compensation (Case C-315/14 of 07/04/2016). The case related to a claim for compensation by a commercial agent. The amount of any claim for compensation is contingent upon the principal in question having derived significant benefit from business relationships with new customers.

The present case involved a commercial agent for eyeglass frames, whose compensatory payment had been reduced by half in the proceedings before the lower courts. Rationale: The customer procurement services performed by the commercial agent were facilitated by the business already existing relationship between the principal and the customers in question in connection with other goods. However, the ECJ, to which the German Federal Court of Justice (Bundesgerichtshof – “BGH”) had referred the case, took the view that the definition of whether a customer is considered a new or an existing customer is not dependent on the identity of the customer, but on the goods brokered by the commercial agent on behalf of his or her principal. The placement of these goods with customers calls for additional brokering efforts, and possibly also the implementation of a special sales strategy, by the commercial agent, particularly if the products in question bear different brand names. Therefore, the customers acquired by a commercial agent may be considered to be new customers within the meaning of Section 89b(1)(1) of the German Commercial Code (Handelsgesetzbuch – “HGB”) even if business relationships already existed between those customers and the principal in connection with other goods.

An application of this ruling to the automotive industry results in the conclusion that, in the context of a claim for compensation, even a customer who has previously purchased a vehicle bearing one of the other brand names of the corporate group in question is to be considered a new customer. A reduction of the amount of compensation such as undertaken by the lower courts in the present case is therefore not be permissible.