Obvious advertising – case No. 3
The company PP is selling on the Internet equipment for printers and computer hardware. In descriptions of the goods offered, the following, inter alia, can be found:
- If you are not satisfied with your purchase, we guarantee you a14-day time limit for the return of goods against reimbursement of the price. We cover the cost of postage.
- All goods come with a two-year statutory guarantee.
- The company PP shall be responsible for dispatching the goods.
The company KK who is also engaged in Internet trade in the same range of products is considering taking legal steps against its competitor because the description of goods applied by PP is based on truisms. Such method of advertising may be represent an act of unfair competition. As a result of marketing efforts made by the company PP, customers more readily decide to make use of its services in spite of the fact that prices of a large part of goods are more advantageous in the Internet shop of the company KK. Results of sales of the company KK are declining.
What remedies are available to the company KK?
Rechtsanwalt & Radca Prawny
In accordance with the content of the German Act on combating unfair competition (hereinafter “UWG””), those activities of an entrepreneur are prohibited which may act against the interests of competitors, consumers or other market players.
An advertisement pointing to a guarantee of reimbursement of the price in case a customer withdraws from an agreement within 14 days of purchasing goods and to the rule of responsibility for dispatch of goods being borne by the vendor when these are sold by mail order represents an act of unfair competition within the meaning of clause 10 of the annex to § 3 section 3 of UWG because it gives the consumers an erroneous impression that the rights which consumers have under the Act are a special characteristic of the offer of a given entrepreneur.
The advertisement used by the company PP may lead customers to an erroneous conclusion that they receive additional benefits which are not offered by other entrepreneurs, while pursuant to § 312g of the German Civil Code (hereinafter “BGB”), in case of agreements concluded outside premises of a company or from a distance a consumer has the right to withdraw from an agreement under § 355 of BGB. Therefore, the “14-day guarantee of reimbursement of the price” does not go beyond the scope of a statutory regulation.
Also the clause on an entrepreneur’s responsibility for dispatch of goods merely reflects provisions of the Act. Pursuant to § 474 section 2 sentence 2 of BGB, § 447 of BGB does not apply to consumer sales and so the risk of accidental loss of or damage to the goods shall pass to a recipient being a consumer in strictly defined cases (i.e. § 446 sentence 1 or § 446 sentence 3, §§ 293 and the following of BGB).
What’s more, the erroneous impression created by the two aforementioned clauses is still heightened by the fact that directly next to them there is information about a 2-year guarantee period which clearly indicates that this right is granted by virtue of the law.
In accordance with the current line of judicature of the Federal Tribunal of Justice (BGH), for similar advertisements to be recognized as an act of unfair competition it is even not necessary that the information about the allegedly special offer of an entrepreneur be presented in a conspicuous manner. It is sufficient for such information to be capable of giving consumers a false impression that a given entrepreneur differs from other entrepreneurs operating on the market just because he voluntarily gives consumers the right to withdraw from an agreement (cf judgment of BGH of 10 March 2014, file reference I ZR 185/12).
And on the other hand, information about statutory guarantee for the goods purchased does not form erroneous ideas because it directly indicates that customers have the right to assert guarantee claims by virtue of the law itself.
In view of the above, the company KK as a competitor of the company PP may have the right to lodge civil law claims which it may asserted first by calling on the latter to desist from violating the law (Abmahnung), and then – should the call be ignored – by means of litigation process:
- claim of nonfeasance – pursuant to 8 section 1 of UWG, the company KK may assert a claim for stopping activities representing unfair competition (stopping to use in advertising and business materials the information about the “14-day guarantee of reimbursement of the price”;
- claim for damages – pursuant to § 9 sentence 1 of UWG, the company PP may be obligated to repair damage caused by an act of unfair competition. Such claim may be asserted in line with general principles provided for in the German Civil Code (§ 249 and the following of BGB). If condition for lodging a claim for damages are to be met, the company PP would have to commit an act of unfair competition in a culpable way.
Deliberations on facts of the case presented above should be taken into account by entrepreneurs engaged in distance selling or selling outside premises of a company when formulating general terms of agreements [GTA] which are to be applicable towards consumers. In particular, one should make sure that information about the rights which consumers have by virtue of the law is introduced into the GTA in a proper and balanced way and do not give consumers erroneous impressions.