Wimdu 50% cheaper than hotels?

This statement is obviously not accurate. The Centre for Competition (Wettbewerbszentrale) was able to successfully obtain a court injunction against the misleading advertising slogan of the online platform Wimdu even on second instance. The Court of Appeal (Kammergericht) confirmed the first instance decision.

Wimdu is an online platform that enables travellers to rent private apartments on a short-term basis and offers, according to its own information, primarily for city trips an alternative to hotels.

In the context of its internet presence, the company advertised with the slogan

"50% cheaper than hotels"

The slogan was also used in an advertising video available on the website.

Brian A Jackson / Shutterstock.com

The Centre for Competition (Wettbewerbszentrale) had objected to the advertising statement as misleading and thus anticompetitive on the grounds that the advertising slogan was incomprehensible to the consumer due to the lack of a reference basis. Furthermore, the savings could not be achieved consistently. There was also a statement on Wimdu's website that contradicted the slogan, namely that the apartments offered were up to 30% cheaper than a hotel room with the same standard. The first instance court followed the view of the Centre for Competition (Wettbewerbszentrale) and prohibited the advertising slogan (LG Berlin, Urteil vom 14.04.2015 – 103 O 124/14).

Decision of the Court of Appeal (Kammergericht) – Wimdu slogan is misleading

The Court of Appeal (Kammergericht) confirmed the first instance judgment by decision dated 11.03.2016 – 5 U 83/15 (Pressemitteilung der Wettbewerbszentrale vom 08.04.2016) and prohibited the advertising slogan.

The first instance court had already stated that the statement was to be understood as meaning that the accommodation mediated by Wimdu was always 50% cheaper than comparable hotels. The argument of Wimdu that the average consumer does not assume that the advertised saving can be achieved at any time, but only when the cheapest offers are still available, was not convincing even on second instance.

In the view of the Court of Appeal (Kammergericht), Wimdu advertised without restriction with a saving of 50% without pointing out that this represents the maximum cost saving in a more or less small number of cases, the conditions of which were not comprehensible to the court.

Conclusion

Comparative advertising is generally not prohibited, but certain competition law principles must be observed. If a company advertises across the board that its offer is cheaper than that of another provider, this must also be the case. If the company does not achieve the advertised saving, the consumer is deceived with regard to the affordability of the offer. Competing companies can take action against misleading advertising statements and can accordingly demand that such statements be discontinued.