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Germany Update: The Admissibility of Price Indications from a Competition Law Perspective – What Needs to be Considered When Indicating Prices?

The price of goods and services is usually one of the most important aspects in competition. Therefore, both competitors and consumers are comprehensively protected against deception about the price of goods and services.

This protection essentially results from the Act against Unfair Competition (UWG), in particular from the so-called prohibition of misleading. This prohibition of misleading prohibits misleading business activities, such as untrue information or other information about the price of a good or service that is likely to deceive.

In addition to the UWG, the Consumer Protection Price Indication Ordinance contains provisions on the indication of prices for goods and services by entrepreneurs vis-à-vis consumers.

In order to create price transparency, the Price Indication Ordinance prescribes, among other things, that entrepreneurs who are obliged to indicate a total price must indicate the so-called reference price to consumers every time a price reduction for a product is announced. This reference price is the lowest total price applied by the trader to consumers within the last 30 days before the price reduction was applied.

Advertising with price reductions

Supermarkets in particular have been warned in the past for various violations of the Price Indication Ordinance. In recent years, the food discounter Netto has also been affected.

In an advertising brochure, Netto advertised the coffee “Jacobs Krönung” in December 2022. In the advertising brochure, a price of “4.44 €” was given. Above the price indication “4.44 €” was the discount indication “-36%”; under the price indication “4.44 €” there was another price indication of “6.99 €” in smaller font. Behind the price indication “6.99 €” was a superscript number 1, which referred to a text in small font size at the bottom of the page: “Previous 30-day best price, except: Jacob’s coronation 4.44 €”.

Two weeks before the publication of the advertising brochure, Netto had already offered the coffee “Jacobs Krönung” at a price of € 4.44.

Decision of the Higher Regional Court of Nuremberg (3 U 460/24 UWG)

The Nuremberg Higher Regional Court ruled that this pricing was inadmissible in the second instance on September 24, 2024. Under the Price Indication Regulation, Netto was obliged to indicate in the advertising brochure the reference price, that is to say, the price that Netto had applied to consumers within the 30 days preceding the application of the -36% price reduction.

The Nuremberg Higher Regional Court held the following:

  • The stated price of €6.99 did not correspond to the reference price, as Netto had already charged the price of €4.44 the previous week.
  • The percentage price reduction of -36% also did not refer to the real reference price.
  • The combination of four different price information is more confusing than transparent for the consumer.

The Nuremberg Higher Regional Court based its argumentation essentially on the fact that the average consumer cannot easily determine the actual reference price due to the overloaded presentation of the price discount.

Result

Even though the judgment of the Nuremberg Higher Regional Court is not yet final – the proceedings are currently pending in the third instance at the Federal Court of Justice – it shows that consumers are comprehensively protected from misleading price information. Entrepreneurs who advertise their goods and services in brochures, flyers, on websites or via other media and channels should therefore urgently observe the relevant requirements. In particular, there is a risk of being warned by consumer protection centres in the event of inadmissible price information. It is also particularly dangerous that the claims for injunctive relief asserted can be justified regardless of any fault and that the prohibition of misleading does not depend on whether deception was intentional or not.

By MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.

For further information or for any assistance please contact germany@transatlanticlaw.com

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