Germany: Advertising Labels Must Be Visible in Social Media Thumbnails

Anyone who regularly publishes paid advertising content on Instagram, TikTok and other social media platforms will know that such content must be clearly labelled as advertising, for example with “Advertisement” or “Advertising”.

This raises an important question: is it sufficient to include the advertising label only in the caption beneath a post?

The Regional Court of Cologne has now ruled that this common practice is not sufficient, significantly tightening the requirements for advertising disclosure on social media. In its judgment of 12 May 2026 (Case No. 88 O 1/26), the court held that even the thumbnail displayed in a profile’s grid view must clearly indicate that the post is an advertisement.

For businesses using social media as a marketing tool, particularly through paid partnerships and sponsored content, the ruling has immediate practical implications.

The Case

The defendant operated a nationwide events and cultural recommendation platform, publishing information about concerts, festivals, exhibitions and other events through its website and mobile application. Users could discover local events via the platform, while organisers were able to promote their own events.

The company also operated several business accounts on a social media platform referred to in the judgment as “W.” (widely understood to be Instagram). These accounts contained a mixture of editorial content and paid advertising.

In the platform’s grid view, users initially saw only the post thumbnails. The full caption, including any advertising disclosure, became visible only after selecting an individual post.

The defendant published one reel promoting a cinema operator’s holiday offer and another advertising a spirits manufacturer. Although both posts were labelled as “Advertisement” within their captions, the corresponding thumbnails gave no indication that the content was commercial.

The German Centre for Protection Against Unfair Competition (Wettbewerbszentrale) first issued a warning before bringing proceedings seeking injunctive relief.

The Decision

The Regional Court of Cologne upheld the claim in full. It ordered the defendant to cease the practice and reimburse warning costs of €374.50, together with interest.

The court found that the defendant had breached Section 5a(4) of the German Unfair Competition Act (UWG), which requires the commercial purpose of a business communication to be clearly identifiable unless it is already obvious from the circumstances.

The court distinguished between businesses promoting their own products or services, where the commercial purpose is generally self-evident, and paid third-party advertising, where a clear advertising label is required.

In this case, the defendant had promoted both the cinema operator and the spirits manufacturer in return for payment without adequately identifying the commercial nature of the content.

Importantly, the court held that the thumbnail itself forms part of the commercial communication. As users encounter the thumbnail before opening the post, the advertising disclosure must already be visible at that stage. Labelling the content only within the caption was therefore considered too late.

The defendant argued that more than 90% of users viewed content via smartphones rather than through the grid view. The court rejected this argument, noting that a significant number of users access the platform via desktop computers or deliberately browse content using the grid view.

The defendant also argued that consumers would naturally recognise the profile as commercial because it was registered as a business account. The court disagreed, finding that a business profile alone does not automatically indicate that every individual post constitutes paid advertising. Business accounts may also publish editorial or non-commercial content, meaning the advertising nature of individual posts cannot simply be assumed.

Practical Implications

The judgment creates an immediate compliance issue for businesses, agencies and influencers publishing paid promotional content on Instagram or other social media platforms that display posts in a grid or thumbnail format.

The long-standing practice of placing an advertising label solely within the caption is no longer sufficient. Instead, the words “Advertisement” or “Advertising” should already appear clearly within the thumbnail or preview image before users open the post.

Although the ruling specifically concerns Instagram, the court’s interpretation of Section 5a(4) UWG is likely to have broader significance. Any platform that presents posts initially through preview images before displaying the full content could potentially be subject to the same principle.

The judgment also demonstrates that regulatory and consumer protection organisations are actively monitoring advertising practices on social media. Businesses should therefore review their current approach to sponsored content without delay.

Companies engaging influencers should also take note. Even where an influencer has been contractually required to apply appropriate advertising labels, the commissioning business may still face legal action if the advertising is not properly disclosed. Businesses should therefore ensure that all sponsored content is fully compliant before publication.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact germany@transatlanticlaw.com

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