Advertising with fixed prices misleading?

The Higher Regional Court (OLG) Hamm had to decide whether an electricity supplier may advertise with fixed prices if this price guarantee was qualified by an asterisk note.

An energy supply company from northern Germany issued a cease-and-desist notice to a competitor in the Ruhr area and demanded an injunction on the grounds of misleading and thus anticompetitive advertising. The competitor advertised its electricity tariff as follows:

"Fixed price* up to 36 months guaranteed. Enjoy price security* – until 30.06.2013".

At the end of the offer, the asterisk note was resolved as follows:

"Excluded are changes due to turnover and/or electricity tax and any new taxes as well as changes to the renewable energy surcharge."

Due to this restriction, the variable part of the tariff offered by the competitor amounted to over 40 %. The energy supplier from northern Germany saw in this a breach of antitrust law and a deception of consumers, who would not expect such a large variable price component in a "fixed price" offer.

Court Decision
By judgment of 08.11.2011, the Higher Regional Court (OLG) Hamm – Az. I-4 U 58/11 decided that advertising an electricity tariff with the term "fixed price" is anticompetitive despite a qualifying asterisk note, if the consumer is insufficiently informed about the variable tariff components included in the price.

While it is generally open to the electricity supplier to mark certain exceptions to price guarantees by means of an asterisk note, such clarification must be suitable to prevent the customer from forming a mistaken impression about the price guarantee offered.

Conclusion

The restriction of the "fixed price" by asterisk note in this case rightly did not meet the requirements of the OLG Hamm, because the consumer was not informed during the advertising that over 40 % of the tariff is variable and that consequently, despite concluding a "fixed price" contract, significant price changes are possible.