Early-bird discount for late bookers anti-competitive?

The Higher Regional Court (OLG) Hamm had to decide the competition law question of whether the advertising of a travel operator is misleading if it continues to grant an early-bird discount to its customers after expiry of the time limit communicated in its advertising.

In the underlying case, a travel operator offering children's and youth travel trips had advertised a trip on its website with a time-limited early-bird discount. Even after the deadline had expired, the price reduction continued to be granted, so that ultimately it provided no advantage to book the disputed trip within the early-bird booking period.

A consumer protection centre saw this as misleading advertising, issued a warning to the travel operator and demanded cessation due to breach of competition law. The consumer protection centre was of the opinion that the advertiser must comply with the time limit it had given and increase the price accordingly after expiry of the deadline. The discount would otherwise mislead consumers into believing that there are financial advantages to deciding to book with the travel operator within the period, i.e. earlier than other consumers.

Court decision
In its judgment of 02.09.2010 – I-4 U 52/10, the Higher Regional Court (OLG) Hamm decided that it is generally not misleading if a time-limited price advantage is continued by the advertiser beyond the initially intended end date due to market conditions.

An inaccuracy in the particulars that would constitute misleading must be apparent from the advertising in question itself at the time of its publication. It cannot subsequently be derived solely from the fact that the early-bird discount is still granted even after its expiry following the initially intended end date of the advertiser. In the case of a forward-looking advertising statement, the question is whether this was correct or not from the perspective of the advertiser at the time of its publication.

Misleading of the consumer does not occur as long as the advertising in question does not exert an inappropriate improper influence through excessive enticement. This would be the case, for example, if interested consumers are subjected to time pressure due to a short deadline, which catches them off guard and induces them to enter into contracts that they would not have concluded had they been aware of the longer period.

From the perspective of misleading, advertisers acting in good faith are not obligated to comply with an end date for the early-bird discount initially communicated by them. Rather, it is sufficient to inform consumers – following a corresponding decision – of a continuing discount. The competition law transparency requirement only demands that already fixed conditions of a sales promotion measure be specified. Information about the possibility that the time limit of a discount campaign or price advantage could be extended due to later considerations by the advertiser is generally not required.

Conclusion

According to the judgment of the OLG Hamm, a travel operator is generally not bound by the early-bird booking period it has advertised. It is therefore not anti-competitive if a travel operator offers the same discount to late bookers after expiry of the discount period as it does to early bookers.

However, it remains to be seen whether the appeal before the BGH will reach the same conclusion. One could certainly take the view that the consumer booking early is subjected to a certain time pressure due to the short deadline in order to make a decision in favour of the supposedly cheap offer. Had the consumer been aware of an extended period, the consumer might possibly have continued to survey the market and might (still) not have entered into the corresponding transaction.