Advertising with "SMS-Flatrate" in violation of competition law?

Advertising with a 'flatrate' is regularly the subject of complaints to the Wettbewerbszentrale. In the present case, the Regional Court (LG) Kiel had to deal with the question of whether it is permissible to advertise an "SMS-Flat" when the number of free SMS messages is limited quantitatively.

A mobile network operator advertised a mobile tariff on its website with the addition "incl. SMS Flat". However, the number of free SMS messages in the advertised mobile tariff was limited to 3,000 SMS per month. After the free SMS were used up, the user incurred consumption-dependent costs.

The Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main e. V. objected to the advertising statement as a violation of the competition law prohibition on misleading advertising, since a "flatrate" is understood by the public to mean that the payment of a flat rate would acquire unlimited usage rights.

After an unsuccessful cease-and-desist letter, the legal dispute was referred to the Regional Court (LG) Kiel for judicial clarification.

Court's decision

As the Wettbewerbszentrale announced in a press release, the Regional Court (LG) Kiel issued an acknowledgement judgment on 24.10.2014 in favour of the competition law enforcers.

The Regional Court (LG) prohibited the advertising of an SMS-Flat if the tariff only allows the sending of a numerically limited number of SMS per month. Advertising with a "flatrate" would create the impression in the consumer's mind of comprehensive and unrestricted usage possibilities of the SMS service without incurring further costs. Therefore, the quantitative limitation of the permitted SMS by the telecommunications provider in the present case was misleading and thus also in violation of competition law.

Conclusion

The public understands a "flatrate" as always being a flat fee in which no further (hidden) costs are incurred. If this is not the case, the offer must not be advertised as such a flatrate either, otherwise there is a risk of competition law cease-and-desist letters due to misleading advertising.