Opening offers with price comparison without time limitation impermissible

The varieties of advertising with highlighted prices are manifold. The spectrum ranges from opening offers via anniversary prices to final and clearance sale campaigns. As the Federal Court of Justice (BGH) established in its judgment of 17.03.2011 (I ZR 81/09), different requirements for price transparency apply to opening offers with regard to the principle of price transparency than in the case of clearance sales, because in the latter case the conditions of availing oneself of the offer and the (unspecified) time limitation can be inferred from the circumstances.

In the case decided, the entrepreneur advertised Oriental carpets as an "opening offer" at a particularly highlighted price (introductory price), which was contrasted with a struck-through higher price. By way of explanation, in the advertising prospectus only a reference was to be found that the carpet collection was a world novelty, for the introduction of which the defendant as manufacturer could grant substantial discounts.

The defendant was prohibited by all lower courts – to some extent in different scope – from advertising such opening prices without explaining the modalities of when the higher original price would come into effect.

The decision of the court

According to the view of the Federal Court of Justice (BGH), this was a sales promotion measure within the meaning of § 4 Nr. 4 UWG (Gesetz gegen den unlauteren Wettbewerb) with regard to which the conditions for availing oneself of the price reduction must be stated clearly and unambiguously. Although there is in principle no obligation to limit sales promotion measures in time, there is only an obligation to draw attention to an actually existing time limitation. This is based on the consideration that unlimited clearance sales are naturally limited in time by the exhaustion of the stock of goods. However, in the case of opening or introductory offers, this is at least different when a higher price for comparison purposes is contrasted with the price actually demanded.

It was already problematic about the price comparison that it was not clear what was the nature of the higher price. In any case, it cannot naturally be the price previously charged in the case of an opening offer. Accordingly, only the original price comes into question, which is to be charged later (after the end of the sales promotion measure). Due to the absence of a time limitation, this was however in breach of the transparency principle and was also misleading, because essential information for the purchasing decision was withheld from the consumer. The behaviour of the defendant entailed the risk of stating "moon prices" as reference prices which possibly would never (not even later) be charged, in order to mislead regarding the value for money of the offer.