An attention-grabbing or eye-catching advertisement needs to include a clear reference to correct possible erroneous preconceptions. According to the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, this is also true for economically significant purchases.

If an attention-grabbing or eye-catching advertisement is liable to mislead consumers, this needs to be cleared up with a clear reference that forms part of the eye-catching segment. We at the commercial law firm GRP Rainer Rechtsanwälte note that the Bundesgerichtshof has clarified in a judgment by default from September 21, 2017 that this also applies to significant purchasing decisions (Az.: I ZR 53/16). According to the case law of the BGH, a clear reference, denoted e.g. with an asterisk, can only be dispensed with under strict conditions. Moreover, it must be ensured that consumers are able to take in the qualification a single glance.

The instant case concerned an eye-catching advertisement from a real estate company promoting a financial investment on its website with a “Festzins Plus: 5,75% bis 6,25% Festzins pro Jahr” (fixed rate plus: 5.75% – 6.25% fixed annual rate of interest). This financial investment was a subordinated loan. It was only after scrolling through lengthy passages of text that consumers reached the risk notices and were informed, among other things, about the risk of total loss. It only became clear after having read these notices that this did not amount to a guaranteed fixed rate of interest.

The BGH held that the consumer organisation bringing the action was entitled to file an injunction suit. The advertising in question was found to be misleading and in violation of the Gesetz gegen den unlauteren Wettbewerb (UWG), Germany’s Unfair Competition Act. Relevant misleading references are essential characteristics of a good or service in much the same way as the associated risks. The BGH ruled that the expression “Festzins plus” (fixed rate plus) used in the eye-catching segment of the advertising was objectively inaccurate because it gave the impression of certainty regarding the payment of interest, even though this was dependent on not only the solvency of the borrower but also hinged on whether sufficient profit is generated. Accordingly, the Court concluded that this did not in fact amount to a fixed rate of interest. Furthermore, the risk notice included in the advertising, only to be found after a long scroll through the text, was found to be insufficient for the purposes of clearing up the error.

Misleading eye-catching advertising can give rise to injunction suits and claims for damages. Lawyers who are experienced in the field of competition law can advise on enforcing or fending off claims.

https://www.grprainer.com/en/legal-advice/intellectual-property-law-and-trademark-law/competition-law.html