Criminal liability of untrue and misleading advertising with prize notifications

In its judgement of 14 June 2006, the Mannheim Regional Court sentenced three defendants to imprisonment for criminal advertising (Article 16 (1) UWG) and ordered the forfeiture of damages against them and two other companies involved. It did not impose forfeiture orders on two other companies involved in the case.

§ Section 16(1) UWG (Criminal Advertising) reads:

Any person who, with the intention of creating the appearance of a particularly favourable offer, advertises in a misleading manner by means of untrue statements in public announcements or in communications intended for a larger circle of persons shall be liable to a custodial sentence not exceeding two years or to a monetary penalty.

According to the findings of the verdict, the defendants were responsible for companies operating in the mail-order business. Via a system of foreign domiciliary companies, they arranged and organised the sending of standardised advertising mailings to consumers, which were personalised by means of address databases and were therefore designed as personal letters. The mailings, each of which was accompanied by product catalogues, contained untrue and misleading prize notifications and promises of gifts. The winnings and gifts described in the mailings were not paid out. This was because the promised winnings were not paid out; no prize competitions took place at all. The gifts sent were only "worthless junk". The defendants' aim was to use the advertising measures to promote the sale of the goods offered in the catalogues; the customer base consisted mainly of older persons with a low level of education.

The verdict was challenged in appeals by the defendants and two companies involved in the case as well as by the public prosecutor's office.

The 1st Criminal Senate of the Federal Supreme Court confirmed the conviction for criminal advertising and clarified the case law on this criminal offence. In doing so, it also considered the assessment of the Regional Court to be correct that the defendants acted with the "intention" to "create the appearance of a particularly favourable offer". This subjective element of the offence was given, even if the untrue and misleading statements did not directly refer to the catalogue goods, but to the prize notifications and promises of gifts. According to the overall impression of the advertising mailings - which was decisive for the legal assessment - these monetary benefits and the catalogue goods together constituted a uniform "offer" within the meaning of Section 16 (1) UWG: The recipient should only be able to receive the gifts if he ordered goods with a minimum value of € 15, (legal context). In this respect, the Federal Court of Justice held that a contractually agreed or statutory right of return was meaningless. Such a legal connection was lacking with regard to the prize notices. However, the Federal Court of Justice ruled for the first time that a uniform overall offer also exists if the decision of the recipients to order goods is to be influenced by the prize notices from an economic point of view (economic connection). This was the case here according to the overall circumstances. In particular, the design of the advertising mailings was intended to give the recipient the impression that he had already been favoured by a prize; against this background, the goods also appeared more favourable because the customer supposedly received more for his money than just these.

The Federal Supreme Court partially overturned and partially confirmed the sentence of forfeiture. In its appeals, the public prosecutor's office rightly objected in particular to the fact that the Regional Court - referring incorrectly to a decision of the 5th Criminal Division of the Federal Court of Justice of 2 December 2005 (BGHSt 50, 299 - "Cologne rubbish scandal") - saw itself prevented from extending the forfeiture beyond the (net) profit to the (gross) proceeds in cases of the kind given here. A company involved in the case was successful in its appeal insofar as the Regional Court had not examined whether customers had claims in tort against the company that took precedence over the order of forfeiture.

Judgment of the Federal Court of Justice (BGH) of May 30, 2008 - 1 StR 166/07
Previous instance:
Mannheim Regional Court - Decision of June 14, 2006 - 22 KLs 605 Js 27831/04

Source: Press release no. 103/2008 of the Press Office of the Federal Court of Justice of 30 May 2008, Herrenstraße 45 a, 76133 Karlsruhe, telephone 07 21 - 159-5013,fax 07 21 - 159-5501, e-mail:

Goldberg Attorneys at Law, Wuppertal-Solingen 2008
Attorney at Law Michael Ullrich, LL.M.(Information Law)