Breach of undertaking not to advertise with customer reviews on website

When a binding undertaking not to advertise is given in response to a cease-and-desist letter, breaches of that undertaking threaten high contractual penalties. Does a contractual penalty also come into consideration if the undertaking not to advertise contains the obligation to cease advertising with a particular statement and customer reviews contain substantially identical statements? The Higher Regional Court (OLG) Cologne had to decide this matter.

A company advertised its 'magic washing balls' for washing machines and dishwashers on the internet with the statement 'Saves detergent'.

A competition association considered this to be misleading advertising in breach of competition law, as the advertising statement had no sound scientific basis. The association sent the advertising company a cease-and-desist letter, whereupon the company issued a binding undertaking not to advertise. Therein it committed itself to ceasing to advertise in commercial transactions for 'magic washing balls for washing machines and dishwashers' as follows: 'Saves detergent'.

After issuing the undertaking not to advertise, the company's website still contained customer reviews such as'I use less detergent.'or'I needed less detergent and the laundry feels softer and not so stiff.'

The competition association took the view that the company had breached its undertaking not to advertise by failing to delete the customer reviews and brought an action.

The company, for its part, takes the view that the obligation not to advertise is limited to its own advertising and does not encompass the publication of reviews.

The Regional Court (LG) Aachen upheld the competition association's claim. The defendant company appealed against the judgment.

The court's decision

The Higher Regional Court (OLG) Cologne dismissed the appeal. The Higher Regional Court (OLG) Cologne decided by means ofJudgment of 24.05.2017 – Az. 6 U 161/16that these customer reviews also fall within the scope of the undertaking not to advertise.

The court interpreted the specific undertaking not to advertise to mean that advertising statements which were substantially identical and appeared in the area of customer comments should also be covered.

The customer reviews constitute advertising because the posting of customer reviews serves solely to create confidence in the performance of the product.

Furthermore, it constitutes an offer made by the company itself, as it makes use of the opportunity to review its product for advertising purposes.

Conclusion

The Higher Regional Court (OLG) Cologne clarifies that statements contained in customer reviews on a company website may constitute unlawful advertising. If a company commits itself to ceasing to advertise a particular product, it may also be obliged to delete customer comments on its website which likewise promote the product in an equivalent manner. Whether this is the case is to be determined on a case-by-case basis within the framework of an interpretation of the undertaking not to advertise.