Unlawful Price Comparison in Antivirus Software

Anti-competitive customer poaching takes many forms. What they all have in common is that inappropriate pressure is exerted on customers who are already attributable to a competitor in order to compel them to change their purchasing decision. A Regional Court (LG) Hamburg had to rule on antivirus software tainted by such conduct.

The operator of several online shops brought an action against the provider of antivirus software. What is peculiar about this software is that it has a function for displaying product alternatives in online shops. Thus, when a customer calls up a product description in an online shop, the software displays identical or alternative products from other providers to him, together with the price and a link to these offers. If a customer clicks on such a link, he is redirected to the respective online shop. The software provider receives a commission for this. This procedure was unacceptable to the plaintiff shop operator, which is why he proceeded against the software provider.

The Court's Decision

Successfully. By judgment of 28.01.2015 (Az. 416 HKO 163/14), the Regional Court (LG) Hamburg prohibited the offering, distribution and promotion of the software. In the court's view, there is an indirect competitive relationship between the parties to the proceedings because the action of the software provider promotes the sales of competitors, namely competing online retailers – so-called third-party promotion. The retailer is therefore entitled to assert competition law claims against the software provider.

On the merits, the court held that the described price comparison system constitutes anti-competitive obstruction of the affected retailer. Whilst mutual solicitation of customers in competition is a typical and tolerable occurrence, it need not be tolerated when competing offers are displayed in close proximity to one's own offers. This imposes competing offers in an inappropriate manner and deliberately redirects the customer already resolved to make a purchase towards the offers of (paying) competitors. This is only tolerable in the event of a clear preponderance of the software provider's interests.

According to the court's reasoning, this cannot be assumed here because the disputed function is forced upon users. Furthermore, it is ultimately not about promoting competition, but solely about economic interests in obtaining a brokerage commission. Comparability with classic price comparison providers does not exist because these are deliberately sought out by the customer in order to find out the lowest price for a product.

Conclusion

Unfortunately, we have no information as to whether the price comparison function is optional and can possibly be switched off. If the user is asked beforehand whether he wishes to use the function, the decision might have been different. In this case, the functionality is not imposed but is a free choice of the user. As a result, the software would again be comparable to other – undoubtedly permissible – price comparison options.