Specification of the calculation basis in advertising with prices?

Competition law provisions must be observed in particular when advertising products or services in order to avoid a cease-and-desist letter. This also includes the Price Indication Ordinance. But what must be stated in advertising for services when the costs for such services vary depending on the case – when a concrete price statement is thus not yet possible? The Federal Court of Justice (BGH) had to answer this question.

A funeral services company advertised its services with a promotional flyer. For individual funeral services, the respective prices were stated.

Below the price list, the following notice was to be read:

"We must draw your attention to the fact that in addition to these listed services, further costs such as removal, grave work may incur."

The funeral services company was sued as a result of the advertising. The plaintiff was of the opinion that the advertising violated the Price Indication Ordinance.

Court decision on the specification of the calculation basis

The Federal Court of Justice (BGH) confirmed with judgment of 14.01.2016 – Az. I ZR 61/14 that a violation of the PAngV and thus a breach of competition law existed.

While the funeral services company could not present a total price to be normally stated in the flyer, since part of the services were not calculable in advance. In particular, removal costs vary depending on distance.

The Karlsruhe judges, however, are of the view that the advertiser in such a constellation must state the conditions of calculation. Merely providing a notice that further costs will incur is not sufficient.

Conclusion

The Federal Court of Justice (BGH) makes clear that when costs cannot be calculated in advance, the calculation basis must also be stated in the advertising. In this case, the advertiser would therefore have had to state the calculation parameters material to the level of removal costs and their amount, i.e. distance allowances or the price per kilometre.