Coupling ban for prize draws and goods purchase contrary to EU law

Under current German law, the coupling of prize draws with the purchase of goods pursuant to § 4 Nr. 6 UWG (Act against Unfair Competition) is anticompetitive. The Court of Justice of the European Union (EuGH) has now established in a judgment of 14.01.2010 (Rs. C-304-08) that the provision is incompatible with the Directive on unfair commercial practices of 11.05.2005 (2005/29/EG) and therefore must be interpreted broadly.

In § 4 Nr. 6 UWG it is stated that anyone acts unfairly who

makes consumer participation in a prize draw or lottery conditional upon the purchase of goods or the use of a service, unless the prize draw or lottery is inherently linked to the goods or service

This made it largely impossible hitherto to couple prize draws or lotteries to the purchase of goods without offering an alternative means of participation. The creation of such alternatives impairs the intended advertising effect and incurs so-called decoupling costs.

The Court of Justice of the European Union (EuGH) has now established that only those practices listed in the Black List in the Annex to the aforementioned Directive or the UWG are ipso facto unfair without further circumstances. This list is to be regarded as exhaustive, and therefore other conduct always requires the presence of special circumstances that justify the anticompetitive nature of the behaviour. The per se prohibition in § 4 Nr. 6 UWG is not in line with this, which is why further conditions must be read into the provision. Special circumstances in this sense exist, for example, when the advertised prize or the promised gain is so attractive that the target audience is inclined to purchase the goods solely because of the winning opportunity, without verifying their decision on the basis of the value for money and quality.

Important in this context is that undertakings which have previously already issued a declaration of intent to abstain from conduct on the basis of § 4 Nr. 6 may potentially terminate the abstention agreement thereby concluded on important grounds pursuant to § 314 Abs. 1 S. 1 BGB. Such termination is mandatory if coupling offers are to be made in the future, since any breach of the existing agreement in any event results in high contractual penalties.