Competition

Emphasising monthly instalments breaches German competition law

A court in Germany has ruled that drawing consumers’ attention to the price of a product through over-emphasising monthly instalment amounts breaches German competition law.

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Competition warning letters

The case concerned a business which paid for a washing machine advertisement in a newspaper. Various payment methods were advertised, including cash, credit and monthly instalments. The monthly instalment amount was emphasised more than the other methods of payment, which led a competitor to send a warning letter and bring a claim for breach of competition law.

The Regional Appeal Court of Jena ruled that emphasising the instalment rate and thus making it more eye catching than other payment methods can infringe German competition law. This is because such pricing strategies infringe the principles of clarity enshrined in § 6a of the Pricing Display Regulations and the duty under § 1 sub-paragraph 6 of the Regulations to ensure the final price is particularly clear.

Breach of German competition law

By over-emphasising the monthly instalment rate, the business had misleadingly drawn consumers’ attention to the advertisement making it more difficult for consumers to compare prices. This amounts to a breach of German competition law.

Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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