Those who advertise prices are doomed?

In principle, for commercial offers or price advertising, the final price including all price components must be stated. However, this only applies if there is actually an offer or advertising with a price. The Federal Court of Justice (BGH) clarified the finer points of this distinction in its judgment of 12.09.2013 (Az. I ZR 123/12).

Several motor vehicle dealers had jointly advertised a special model in a magazine and specified a price of EUR 14.990,00. The price was marked with an asterisk reference, under which the following was stated:

"Non-binding manufacturer's recommended price excluding delivery costs. For the exact final price, please contact your Peugeot dealer."

A competition association assumed a breach of the Price Indication Ordinance (PAngV) and sought an injunction against the advertisers. In its view, the specification of a final price was required in this form of advertising, but was not provided.

The decision of the court

The lower courts shared this view, but the BGH did not. In its opinion, an "offer" requires that the customer can gather from the advertising enough information to have a sufficient basis for a purchasing decision. However, since the price indication was marked as a "non-binding price recommendation", this requirement was not met with regard to the most important information – namely the price. Furthermore, it was clear to the consumer that the price recommendation, i.e. the list price in the new car business, is never the final word. Moreover, the price recommendation no longer carries the significance it had a few years ago.

The court also refused to see price advertising, even though the price was highlighted as an eye-catcher. The statement "Non-binding manufacturer's recommended price" was unquestionably not to be understood as a price indication by the seller, but merely as a reference to the manufacturer's price recommendation. Since the asterisk reference was sufficiently clear, it was to be assumed that the relevant public would correctly interpret the statement.

Conclusion

Price indication is not the same as price indication – the finer points matter. However, assessing these is difficult and entails risks for the advertiser. The rule of thumb is that significantly more care must be taken in designing advertising with (any) price than in pure image advertising. If price indication is used, then preferably a final price indication. Should this not be possible in a particular case, one should consider why this is the case and whether a possible exception to the statutory requirement for final price indication can be justified.