Strict Guidelines for Discount Price Advertising – OLG Nuremberg Case No.: 3 U 460/24 UWG
When advertising with price reductions, the reference price must be clearly recognizable to the consumer. If this is not the case, the advertisement can be misleading and a violation of competition law. This was decided by the OLG Nuremberg in a ruling dated September 24, 2024 (Case No.: 3 U 460/24 UWG).
According to the European Price Indication Directive, when advertising price reductions, the lowest price charged in the 30 days prior to the discount promotion must be indicated. However, how this requirement is to be implemented is legally disputed, as noted by the law firm MTR Legal Attorneys, which advises on competition law, among other areas.
Misleading Price Representation
With its ruling, the OLG Nuremberg has strengthened the position of consumers. In the underlying case, a competition association had complained about a “30-Day Best Price” advertisement from a grocery discounter in a promotional flyer. In the flyer, a product was advertised with four price indications. The current price of €4.44 was advertised as a percentage price advantage of minus 36 percent. Additionally, the previously charged price of €6.99 was indicated. A footnote pointed out the lowest price during the 30-day period before the reduction—€4.44, which was the same price as in the current discount promotion.
The complaining competition association considered this type of price presentation misleading. The OLG Nuremberg agreed, viewing this combination of price information as misleading advertising and a violation of competition law. It reasoned that the consumer would not sufficiently understand from the representation in the promotional flyer that the displayed price reduction refers to the lowest price of the past 30 days. According to the regulation in the Price Indication Ordinance that has been in effect since 2022, the retailer is obliged to provide this information. In practice, this means that the consumer must be able to easily recognize the lowest price that the retailer has offered in the last 30 days based on the specific information in the advertisement, as made clear by the 3rd Civil Senate of the OLG Nuremberg, which is responsible for competition law.
Price Indications Must Be Understandable to Consumers
While a retailer is generally allowed to advertise a price reduction, the information must be clear and understandable to the consumer, the Senate further stated. The limit of what is permissible is exceeded if the consumer is left in the dark about the actual extent of the price reduction due to a misleading representation or a combination of ambiguous or unclear price information.
When multiple prices are given for the advertised goods, it must be clear from the representation that the price reduction refers to the lowest price of the last 30 days, the OLG Nuremberg clarified. A clear indication of the “best price” is an important guide for the consumer in their purchasing decision. The OLG has allowed an appeal to the Federal Court of Justice.
Similar Ruling by the ECJ, C-330/23
In a similar case, the ECJ ruled on September 26, 2024, that when advertising price reductions, the reduction must be based on the lowest price of the past 30 days (Case No.: C-330/23). This is intended to prevent retailers from initially raising prices before advertising a price reduction. The ECJ justified the decision by stating that consumers should be protected from misleading practices.
For retailers, these rulings mean that they can no longer advertise price reductions based on the most recently charged price. This particularly affects industries where price changes occur frequently. It may necessitate a realignment of previous advertising strategies. Violations of competition law could lead to warnings, injunctions, and claims for damages, which ideally should be avoided through a forward-looking advertising strategy.
The law firm MTR Legal Attorneys advises on competition law and represents the interests of its clients in both defending against and enforcing warnings, injunctions, and damage claims.
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