Limited product supply requires clear notification to avoid misleading the consumer

A prominent German discount retailer (Lidl) advertised two different products (Irish butter / computer monitor) in a newspaper advertisement. In both cases, the following notice was given at the end of the page: "This item may sell out on the first day of the offer due to limited stock availability". In one case, this restriction was referenced via an asterisk (*) next to the price, in the other case it was not. In both cases, the advertised goods sold out on the first day. The Federal Court of Justice (BGH) upheld both actions seeking an injunction at final instance (judgment of 10.02.2011 – I ZR 183/09).

The allegation of unfair competition is not justified under currently applicable law by inadequate stocking of goods, but rather by the failure to disclose this circumstance. In the court's view, this requires a clearly worded, easily legible and clearly visible notice of the limited product supply. Insofar as an asterisk was placed behind the price of the offer, this was too unclear to perform a "further referential function", so that these requirements were not met in the present case. The bait-and-switch effect of the offer thereby constituted unfair misleading advertising.

Accordingly, advertising is always unfair if an entrepreneur calls for the purchase of goods without disclosing that he has reasonable grounds to assume that he will not be able to provide or have provided such or equivalent goods or services for a reasonable period of time in adequate quantities at the stated price. However, the entrepreneur can defend himself against this allegation by asserting – if necessary, subject to proof – that the actual demand was not foreseeable.

The decision is also interesting with regard to the interpretation of the term "equivalent goods". In the present proceedings, the defendant attempted to defend itself with the assertion that identical trade goods at the offered price were available at any time. In response to this, the Federal Court of Justice (BGH) explicitly clarified that there is precisely no equivalence in this sense between branded goods and goods distributed under a house brand.

Finally, the court also – independently – confirmed the view of the Higher Regional Court (OLG) Cologne (judgment of 08.10.2010 – 6 U 69/10) that anyone involved in the dissemination and distribution of advertising in the media bears direct responsibility if their conduct has a commercial nexus (§ 8 Abs. 2 UWG – not to be confused with liability as an accessory). This does not apply only if the party involved has no decision-making authority, acts in a completely subordinate capacity (such as poster hangers and leaflet distributors) and no intentional conduct can be established. In particular for advertising agencies and cases of division of labour within corporate groups, this represents a clear statement.