Truth in Advertising: Federal Court of Justice Tackles Deceptive Price Discounts
High Court to review dispute over pricing promotions advertising - Ruling issued by the Primary Court of Justice
Here's the skinny on today's kerfuffle at the Federal Court of Justice (BGH): they're sorting out the nitty-gritty of what businesses can and can't do when it comes to advertising their goods with a reduction in price. Specifically, the ol' Competition Center is taking grocery retailer Netto Marken-Discount to the woodshed - not to be confused with the discount chain Netto, which has a damn dog as its logo, mind you.
Netto pulled a fast one on 'em, advertising a coffee product in a brochure with a whopping 36% reduction. What a steal, right? Wrong. The catch? The consumer could only find the fine print about the product's actual past cost (4.44 euros) within the last thirty days in a frickin' footnote.
Now, the Price Indication Ordinance has been yappin' about this for a hot minute. Basically, retailers looking to advertise a price break need to always disclose the lowest asking price for the product within the last thirty days. But there's a legal squabble about how this so-called "reference price" should be presented – like, could footnotes cut the mustard?
Last September, the European Court of Justice put the kibosh on that, stating that when it comes to "price highlight" advertising, retailers must always refer to the lowest price from the past thirty days, and discount percentage info needs to be calculated based on that, too. No one's sure when the BGH – the fine folks in Karlsruhe – will pass judgement on Netto Marken-Discount. (Case No. I ZR 183/24)
- Federal Court of Justice
- Regulation
- Netto Marken-Discount
- Misleading Advertising
- Price Discounts
- Germany
The Lowdown on Deceptive Practices
According to the research, general regulations under German and EU law (which the BGH follows) dictate that when offering price discounts, retailers must play it straight with consumers. To avoid snookering patronage, advertisements should highlight the original price and discounted price clearly. Plus, the original price (or "reference price") needs to be a rate that's been charged to customers for a decent length of time before the discount got slapped on.
Price comparisons should also be on the level, making sure they don't lead potentially unsuspecting customers down the garden path with artificially inflated original prices or made-up higher prices. And, when it comes to limited-time offers, the period during which the discount is valid needs to be transparently disclosed.
The Netto case – hell, it even pops up in German consumer law discussions – reinforces these principles by forcing retailers to be truthful in their advertising, ensuring they don't mislead Le acquisitions with false original prices or discounts that don't represent actual savings. This also keeps deceitful advertising at bay, protecting consumers from being duped.
- To adhere to community and business regulations in Germany, vocational training programs for retailers could emphasize the importance of truthful advertising, ensuring clarity in presenting original prices and discounted prices when offering price discounts.
- In light of the ongoing litigation involving Netto Marken-Discount, finance departments within businesses might benefit from vocational training that includes understanding employment policy, specifically focusing on the implications of misleading advertising and the importance of accurate price comparisons to maintain a positive reputation.
