Germany’s Supreme Court expands regulatory reach over online learning programs

Germany’s Distance Learning Protection Act (“Fernunterrichtsschutzgesetz” or “DLPA”) requires providers to obtain a permit from the Central Authority for Distance Learning (“Staatliche Zentralstelle für Fernunterricht” or “ZFU”) before offering regulated distance learning programs to participants in Germany.

A program is within the DLPA’s regulatory scope if five cumulative criteria are met:

• A civil law contract (such as an enrollment agreement or terms of service) governs the relationship between the provider and the participant.
• The participant pays a fee to the provider.
• The provider and participant are physically separated most of the time.
• The delivery of learning content is predominantly asynchronous.
• At least one individual assessment of the participant’s learning progress takes place.

The ZFU reviews applications to ensure that the program is suitable to achieve its stated learning objectives, that contractual terms comply with DLPA requirements, and that promotional materials provide complete and accurate information. Permits must be renewed every three years, and substantial program modifications require fresh approval.

Pursuant to the Federal Supreme Court's recent rulings, online learning programs, including coaching, mentoring, and business training programs, may qualify as regulated “distance learning” under the DLPA.

In its decisions, the Court addressed a “Business Mentoring Program” involving video modules, online meetings, and regular homework assignments. The Court held that the DLPA's reference to the teaching of “knowledge and skills” must be interpreted broadly. There is no requirement for formalized curricula, academic credentials, or minimum pedagogical quality. Where the “center of gravity” of a program lies in structured knowledge transfer — supported by videos, workbooks, recorded sessions, and guided exercises — this falls within the scope of the DLPA.

Following the Federal Supreme Court's rulings, a program marketed as “coaching,” “mentoring,” or “business consulting” will also be treated as distance learning if the program includes systematic knowledge transfer. Therefore, such programs also may require a permit under the DLPA.

In its rulings, the Federal Supreme Court held that the DLPA is not limited to contracts with consumers but also applies to B2B online education courses.

The Court confirmed that the DLPA applies to “all participants” who enter into distance learning contracts — regardless of whether they act as consumers or as businesses. The Court reasoned that the statute's protective purpose — shielding participants from low-quality or fraudulent offerings — extends equally to business professionals who may lack expertise in evaluating educational programs.

This is particularly significant for providers of executive education, professional development, and entrepreneurship programs, to which the regulatory framework of the DLPA applies as well.

In its rulings, the Court gives guidance on when online instruction crosses the threshold into regulated distance learning that falls within the scope of the DLPA.

The Court held that participants are not considered “physically separated” where instruction occurs through bidirectional, synchronous online communication that functionally resembles in-person teaching — that is, where learners can interact with instructors in real time without additional effort. This means that live “virtual classroom” sessions with immediate, unrestricted Q&A capability may fall outside the DLPA’s scope, similar to traditional face-to-face instruction.

However, in the assessment of whether an online education course falls within the scope of the DLPA, several factors have to be considered:

• (Pre-)Recorded sessions may result in DLPA application. If live sessions are recorded and made available for later viewing, these sessions count as asynchronous education falling within DLPA’s scope.
• Mixed formats require holistic assessment. Programs combining live webinars with pre-recorded modules, on-demand video libraries, or self-paced learning must be evaluated as a whole. Where asynchronous elements predominate, the DLPA will apply.
• Contract terms decide, not actual delivery. The Court has confirmed that the relevant analysis focuses on what the contract promises — not necessarily how the program is delivered in practice.

In practice this means that providers offering hybrid or blended learning formats should map each program component and assess where the focus of the program lies.

If the DLPA applies, providers of online education programs have to obtain a permit by the ZFU before offering their programs.

• Full fee repayment. Without the necessary ZFU permit, the distance learning contract is void under the DLPA and unenforceable, which may expose providers to full fee repayment claims.
• Fines up to EUR 10,000. Violations of the DLPA may result in administrative penalties of up to EUR 10,000.