- Sweeping Advertising Statements Can Be Misleading
- January 27, 2016
- Law Firm: GRP Rainer LLP - Cologne Office
- The Landgericht Berlin (Regional Court of Berlin) ruled on April 14, 2015 that blanket advertising of savings is misleading to consumers (Az.: 103 O 124/14).
GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: The Court said that a sweeping advertising statement such as “50 per cent cheaper than ¿” can only be used if this saving applies all of the time and does not simply represent an average, as this kind of unqualified statement leads consumers to assume that this is in fact true for every offer. However, if this is only true on average, then this advertising is misleading to consumers and therefore infringes competition law.
In the case in question, a holiday homes agent had advertised that his offers were “50 per cent cheaper than hotels”. However, the Wettbewerbszentrale (Centre for Protection against
Unfair Competition) brought an action against this due to the fact that this blanket saving was not always achieved. The Landgericht Berlin ruled in favour of the consumer advocates, stating that the sweeping advertising statement would give consumers the impression that this saving is made in all cases and not simply on average. It went on to say that if the offers are not cheaper in all instances then the advertising statements needed to be qualified; these could, for example, be worded “up to 50 per cent cheaper”. Consumers were being misled by unqualified statements, and this constituted an infringement of the German Gesetz gegen den unlauteren Wettbewerb (UWG) [Unfair Competition Act].
The UWG regulates the behaviour of market operators and competitors among themselves and is designed to ensure fair competition, which is why competition law infringements are sometimes met with severe punishment. Formal warnings, interim orders, damages claims and injunction suits are possible consequences that a company could be faced with in the event of violations. All of these cost time and money.
From a legal perspective, advertising can thus be a bit of a tightrope walk for businesses. Failure to observe legal requirements may, for instance, give rise to infringements of the Gesetz gegen den unlauteren Wettbewerb. A lawyer who is qualified in the field of competition law ought to be consulted to fend off and enforce claims.