Advertising with crossed-out prices permitted?

The First Civil Senate of the Federal Court of Justice (BGH) responsible for competition law had to decide whether advertising featuring highlighted introductory prices juxtaposed with higher crossed-out prices is misleading and thus contrary to competition law.

A carpet merchant with a business location in Friesenheim near Freiburg advertised his carpet collection "Original Kanchipur" with introductory prices in a brochure attached to the Badische Zeitung. The introductory prices were juxtaposed with significantly higher crossed-out prices. In the text of the brochure, the carpet merchant pointed out that the collection was a world first and that he, as the manufacturer, could offer substantial discounts for its market introduction. A competitor considered this advertising to be contrary to competition law due to a breach of the transparency requirement, sent a cease-and-desist letter to the carpet merchant and demanded discontinuation.

Court decision
According to press release no. 44/2011, the Karlsruhe judges decided by Judgment of 17.03.201 – Az. I ZR 81/09 that advertising featuring highlighted introductory prices juxtaposed with higher crossed-out prices is only permissible if the advertising makes clear how long the introductory prices apply and from when the higher crossed-out prices are to be charged. Otherwise, the advertising violates the prohibition against misleading advertising.

Anyone advertising with a higher crossed-out price must make clear what this price refers to. If it is the regular price that the merchant will charge following the conclusion of the introductory advertising campaign, he must specify from when he will bill this regular price. Unlike clearance sales, in respect of which case law does not require the merchant to impose a time limit, an introductory offer that advertises with crossed-out higher prices must have a time limit.

Conclusion

Exercise caution in the advertising presentation of introductory prices. According to this ruling by the highest court, a time frame must always be specified here. However, for regular price reductions, advertising with crossed-out prices remains permitted.