Violation of fixed book prices through coupon

Does a discount coupon for a product which itself is not subject to price fixing but is sold in connection with a price-bound publishing product violate statutory fixed book pricing and thus German competition law? The Higher Regional Court of Stuttgart (OLG Stuttgart) had to address this legal question.

A nationwide drugstore chain in Germany issued discount coupons for the next purchase of its customers when they bought drugstore items. With these vouchers, customers could purchase not only drugstore goods but also price-bound books at a reduced price on their next purchase.

This was challenged by a so-called price-fixing trustee, who in his view contended that the drugstore chain circumvented the applicable fixed book pricing through the coupons. The trustee demanded that the company cease this discount campaign immediately in the notice of cessation issued.

To clarify that no obligation to cease was owed, the Ulm-based company initiated a declaratory action before the Regional Court of Ulm (LG Ulm) and then in the second instance before the Higher Regional Court of Stuttgart (OLG Stuttgart).

Court decision

The Higher Regional Court of Stuttgart (OLG Stuttgart) ruled on 11.11.2010 (Az. 2 U 31/10) that a discount coupon issued upon purchase of items which do not fall under fixed book pricing does not constitute a violation of the Fixed Book Pricing Act (Buchpreisbindungsgesetz) even if this coupon is used to reduce the price when purchasing a price-bound book at a later date, thus ruling in favour of the drugstore chain.

The Stuttgart judges justified their ruling by stating that the issue of the coupon for the first purchase represented a discount for that very purchase. The second shopping trip in the drugstore, even if involving a price-bound book, did not constitute a discount for this product.

Conclusion

The granting of discount vouchers for purchases of non-price-bound goods is not objectionable under competition law in the form presented here. However, it would be different if the drugstore chain had also distributed discount coupons for the purchase of price-bound goods. According to the ruling of the Higher Regional Court of Stuttgart (OLG Stuttgart), this would constitute a violation of fixed book pricing.