By decision of March 11, 2021, file reference I -4 U 173/20, the Higher Regional Court of Hamm ruled that struck-through price indications in an online shop constitute unfair competition if they refer to prices in brick-and-mortar retail and not to previously collected online prices.
Price indications with struck-through prices are frequently found in online shops.
The defendant company operates an online shop for bicycles. The prices of the bicycles were marked with struck-through prices. Below the struck-through price, a lower price was displayed. The defendant company intended to convey that the bicycles were significantly cheaper when purchased from them. However, the struck-through prices referred to price indications from brick-and-mortar retail.
Strikethrough price indications from brick-and-mortar retail in an online shop are misleading.
Both the Regional Court of Bielefeld (judgment of 06.10.2020, file no.: 15 O 9/20) and the Higher Regional Court of Hamm (decision of 11.03.2022, I -4 U 173/20) deemed the strikethrough prices, which referred to brick-and-mortar retail prices rather than previously recorded online prices, to be a violation of competition law. This practice would mislead customers about the actual previous price and the non-existent discount.
The specific sales channel must be the determining factor, as it is to be assumed that prospective buyers compare prices from various providers within the same sales channel, i.e., online. Therefore, in this instance, only the defendant's online shop and its pricing structure are authoritative.
The comparison of an allegedly old and new price implies that the old price originated from the online shop, i.e., the same sales channel. However, since these prices referred to those of brick-and-mortar retail, they are misleading and consequently unlawful.
Unchanged strikethrough price indications are impermissible when a new price reduction occurs.
The courts also raised concerns regarding the duration of price promotions. While it is generally acceptable to advertise with original values as strikethrough prices for a period of up to 6 months – provided these relate to online retail prices – this practice becomes impermissible if a further reduction in the purchase price has occurred in the interim. In such a scenario, the higher value may no longer be displayed. When a price is reduced again, it is simply misleading to continue presenting the originally highest price as the previous price. It is axiomatic that the higher price used for comparison must have been valid immediately prior to the price reduction. Companies are obligated to adjust the strikethrough price if it continues to decrease.
Conclusion
Erroneous price indications in an online shop carry a very high risk of competition law warnings.
We would be pleased to advise you on structuring price indications in your online shop to prevent warnings, or assist you in enforcing your claims for injunctive relief against competitors whose price indications violate competition law.
Sources:
Regional Court of Bielefeld, judgment of 06.10.2020, file no.: 15 O 9/20
Higher Regional Court of Hamm, decision of 11.03.2022, I -4 U 173/20
GoldbergUllrich Attorneys at Law 2021
Attorney at Law Christopher Pillat, LL.M. (Intellectual Property Law)
