OLG Hamburg: Advertising Lowest Price Guarantee Potentially Anti-Competitive in Germany

According to a ruling of the Oberlandesgericht Hamburg (Higher Regional Court of Hamburg), advertising with a lowest price guarantee is potentially misleading and thus anti-competitive (Az.: 5 U 160/11).

“Lowest price guarantee. Your interest is our commitment. If within 14 days of purchasing a product from us you see the same article –- with the same capacity and within our region – at a cheaper price, we will refund you the difference or take the item back.” That is a translation of the words used by a specialist retail chain for advertising purposes.

However, it did not in fact live up to this commitment in each and every instance. This much is clear from the case before the OLG Hamburg in which a customer furnished a promotional brochure in a specialist retailer belonging to this chain. A particular fully automatic coffee machine was considerably cheaper there than in the retail store itself. The customer therefore wanted the device at the price featured in the brochure, but the specialist retailer would not take any notice of this. A competition association subsequently took legal action, arguing that the lowest price advertising was misleading.

The OLG Hamburg granted the claim. According to the OLG, notwithstanding the individual case, the lowest price advertising was misleading simply by virtue of its wording and thus anti-competitive, because the promotional slogan links two different guarantees with the word “or”. The Court went on to say that the first part did in fact represent a lowest price guarantee, as the specialist retailer had committed to refund customers the excess sum of money under certain conditions, which did amount to a guarantee of the lowest price. The second part, on the other hand, needed to be assessed differently. This was said to represent a typical “money-back-guarantee” case, which was not a guarantee of the lowest price. The Court thus held that the advertising featuring a lowest price guarantee was misleading and, as a consequence, anti-competitive.

The case demonstrates that retailers need to be careful when it comes to their advertising statements. If their conduct is found to be anti-competitive, this may give rise to serious consequences, e.g. formal written warnings. In this context, it is not necessary for the tradesperson to be aware that he has behaved in an anti-competitive manner. A lawyer who is qualified in the field of competition law ought to be consulted to fend off and enforce claims.

GRP Rainer LLP is an international firm of lawyers and tax advisors who are specialists in commercial law. The firm counsels commercial and industrial companies and corporations, as well as associations, small- and mid-sized businesses, self-employed freelancers and private individuals worldwide from offices in Cologne, Berlin, Bonn, Dusseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London UK.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.

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