Advertising – “All that glitters is not gold”.

Home > Advertising – “All that glitters is not gold”.

Whether it is a DAX corporation, a medium-sized company or an up-and-coming “start-up”, regardless of their respective size and foundation, companies always pursue a common goal: economic growth.

An indispensable means prerequisite for healthy and organic growth, regardless of the company’s respective industry, is suitable and, above all, purposeful advertising for the company that, above all, also addresses the right target group.

Weighing up the opportunities and risks

However, when designing and publishing advertising content, it is imperative to observe a number of prerequisites in order to protect one’s own interests on the one hand and, above all, not to violate the rights of other market participants and competitors on the other. In order to ensure which requirements and risks must be observed in the area of advertising, especially with regard to the presentation of one’s own market position, services or products, this article is dedicated to an exemplary series of legal questions, problem areas and innovations concerning the regulations of the Unfair Competition Act (UWG). The article is intended only as a concise, informative overview and to sensitize you to a number of different points of reference.

Consumer Protection and the Law of Commercial Practices

Where different economic interests meet, clear rules and regimes are needed to set the guidelines in appropriate dealings between advertising stakeholders.

Advertising and competition law in Germany

In Germany, the Unfair Competition Act (UWG) regulates fair business practices between companies. It prohibits – in brief – unfair practices such as misleading advertising, unreasonable harassment of consumers, unfair comparative advertising and obstruction of competitors. The aim of the UWG is to ensure the protection of consumers and competitors. Violations can be warned by competitors or associations and result in claims for damages.

When publishing advertising, companies must ensure truth, clarity and fairness. Statements about products should be verifiable, and important information (especially that which significantly influences the purchase decision or the conclusion of a contract) must be clearly recognisable. Comparative advertising must be objective, consumer harassment must be avoided, and the request and use of personal data require consent Advertising should be recognizable as such, trademark rights respected, and local regulations observed. Young people and children deserve special consideration, and advertising should be appropriate and up-to-date.

Comparative advertising and current developments

When companies want to position themselves advantageously in the market, there is often an attraction to comparing themselves with other companies and, above all, competing market players, and this comparison often takes place in the area of advertising. One would like to particularly emphasize the uniqueness of the own product or the own service, in order to underline in such a way the so-called unique selling point (USP) particularly. However, special caution is required here! This applies not only in comparison to other market participants, but also with regard to one’s own goods and services.

Admissibility of price comparisons

In particular, price comparisons with a “recommended retail price (RRP)” are often the subject of disputes under competition law. With the most recent amendments to the Price Indication Ordinance (PAngV) of May 2022, the German legislator has introduced new regulations in the comparison of UVP and the customer’s own (more favorable) price, which in some places “leverage” the strict information requirements of Section 11 PAngV (indication of the lowest 30-day price in discount advertising). Even or especially in the case of a price comparison with an RRP in advertising, there are a number of stumbling blocks, as some relevant court decisions of recent months show very clearly.

OLG Frankfurt on the "recommended retail price".

Thus, the the OLG Frankfurt a.M., decision of 28.06.2022, 6 W 30/22 – exemplarily decided the following on misleading advertising with non-binding price recommendation, which had a price comparison as its object, in which the advertiser advertised with its own RRP, which it had given itself in advance, but then ignored in its own offers.

In the case at issue, the provider advertised with the indication of a saving of, among other things, “-18%” or comparison of a crossed-out price with a current price, whereby the new price was compared with a comparative price. This comparison price, which the defendant had set itself, was referred to as the “recommended retail price” or “suggested”/”recommended” retail price “as provided by the manufacturer, a supplier or a dealer”.

The Higher Regional Court of Frankfurt considered this practice to be misleading and affirmed a claim for injunction pursuant to Section 8 (1), (3) No. 1, Sections , 5 (1) Sentence 2 No. 2 UWG. According to the court, when comparing a price with an EIA, the consumers addressed assumed that this recommendation or this price was recommended as a target price by a third party independent of the supplier in question and that this price was still valid. On the basis of this assumption, such an offer is considered to be particularly price-worthy. In particular, the public does not expect manufacturers to advertise with their own RRP, which they then do not adhere to in their own offers. It is therefore also irrelevant whether the advertiser in the case had actually spent the stated RRP once in the past and the savings were calculated correctly.

Outlook and Consequences

As this article shows, advertisers should be aware of the legal assessment and consequences of advertising messages before they are published. A dispute about competition disputes can not only be time-consuming, but also very quickly become quite costly. There is the threat of warnings from consumer associations and competitors. It is therefore worth having advertising content checked for legal risks even before it is released, so as not to be confronted with “recall actions” or claims for damages afterwards.

True to the motto:

"better safe than sorry"

Do you need support in reviewing your advertising or averting compensation claims? Then please contact our expert lawyers.