The First Civil Senate of the Federal Court of Justice (BGH), which is responsible, among other areas, for competition law, has ruled that advertising a 19% discount is anti-competitive if the advertisement does not clearly and unequivocally state that the discount can only be applied to goods available in stock at the store.
The parties are competitors in the retail sector for photo and video cameras. The defendant, operating a relevant market in Stuttgart-Feuerbach, advertised a price reduction in a brochure with the following text:
“Only today, January 3rd, photo and video cameras without 19% VAT!*”. The asterisk footnote in the brochure specified: “Save a full 19% off the sales price.”
On January 3, 2007, two employees of the plaintiff visited the defendant's store and received a 19% discount on the sales price when purchasing a camera. Upon inquiring whether out-of-stock items could also be ordered, they were informed that this was possible. However, the discount would not apply to such orders, as it was exclusively available on January 3rd for goods physically in stock at the store.
The plaintiff considers the advertisement for the discount to be anti-competitive due to a violation of the transparency principle and sought injunctive relief, a declaration of liability for damages, and disclosure of information from the defendant. The Regional Court of Stuttgart had granted the claim, and the Higher Regional Court of Stuttgart affirmed this decision. In a separate case that did not reach the BGH, the Higher Regional Court of Karlsruhe had deemed the identical advertisement, commissioned by an affiliated company of the defendant, to be permissible under competition law.
The Federal Court of Justice dismissed the appeal filed by the defendant retail company against the judgment of the Higher Regional Court of Stuttgart. The advertised price reduction is classified as a sales promotion measure. The conditions for availing such a measure must be clearly and unequivocally stated within the advertisement itself. The defendant's advertisement fails to meet these requirements. For consumers to make informed purchasing decisions, they must be able to ascertain the conditions imposed by the retailer for claiming a benefit. This specifically includes the condition that an announced discount will not be applied to goods that are not (or no longer) in stock but are available for order. Should retailers intend to impose such restrictions on an advertised price reduction, they must disclose this directly in the advertisement.
Judgment of the BGH of December 10, 2009 – I ZR 195/07
Lower Courts:
Higher Regional Court of Stuttgart – Judgment of november 22, 2007 – 2 U 45/07 (WRP 2008, 517)
Regional Court of Stuttgart – Judgment of May 16, 2007 – 39 O 46/07 KfH
Source: Press Release of the Federal Court of Justice
Goldberg Rechtsanwälte
by
Michael Ullrich, LL.M. (Information Law)
Attorney-at-Law and
Specialist Attorney for Information Technology Law
Email: info@goldberg.de
