Uncovering the Fuss: Federal Court of Justice Investigates Netto Marken-Discount's Misleading Discount Advertising
Court Considering Case on Advertised Price Reductions - Ruling from Primary Court Overseen
Hey there! Let's dive into today's hot topic – the Federal Court of Justice (BGH) is sorting out the fuss about the rules for companies advertising discounted prices for their products. The crux of the matter hinges on food retailer, Netto Marken-Discount, and their brochure ad for a 36% discounted coffee product, causing quite a stir.
In the ad, both the current price (4.44 euros) and the price of the previous week (6.99 euros) were given. But consumers had to turn to the fine print, a footnote, to find out that the product had already cost 4.44 euros within the last 30 days – a sneaky trick that's got ‘em in hot water.
What's the scoop?
According to German law, businesses advertising price discounts must disclose the lowest price demanded for the product in the last 30 days. However, controversy abounds in terms of how this so-called "reference price" should be displayed. The European Court of Justice provided some clarification when they ruled in September 2024 that advertising claims like "price highlights" must always reference the lowest price of the last 30 days, and discount percentage figures must be calculated based on that figure.
It's uncertain when BGH will issue its ruling in the Karlsruhe proceedings against Netto. (Case No. I ZR 183/24)
A Brief Overview of Advertising Rules
In the realm of German advertising law, companies must ensure their price discount advertising is truthful and transparent:
- The discounted price must be clearly visible and offered.
- The "original" or "previous" price used as a reference for the discount must genuinely reflect the price charged for a reasonable period before the discount.
- Advertisements should not mislead consumers about the discount by suggesting it if the product was not previously sold at the reference price.
- Comparative price advertising is under close scrutiny to adhere to unfair competition and consumer protection laws.
A Well-known Case: Netto Marken-Discount
The BGH previously established that misleading pricing in discount advertising is a big no-no. If a retailer advertises a discount by showing a previous price, that previous price must be the price that the product was regularly sold at before the price reduction – not an inflated price intended to mislead consumers.
The Bottom Line
Discounts based on real previous prices must comply with the following rules:
- The previous price must have been applied for a reasonable amount of time before the advertised discount.
- Consumers should not be misled about the actual savings.
- The BGH enforces these rules stringently, aiming to protect consumer interests and sustain fair competition.
With Netto Marken-Discount in the hot seat, let's follow this case closely and see if they come out on top or if the court rules against them!
Given the ongoing investigation by the Federal Court of Justice (BGH) regarding misleading discount advertising by Netto Marken-Discount, there may be changes in community policy for advertising practices on price discounts. This case underscores the importance of vocational training in business practices, particularly in the field of policy-and-legislation and politics, as companies must comply with general-news regulations regarding truthful and transparent advertising. Adherence to these rules ensures fair competition and consumer protection, making vocational training in advertising law a crucial aspect for businesses to thrive in a complex market landscape.
