Advertising in Germany is subject to strict legal regulations, primarily governed by competition law, trademark law, and copyright law. Companies and advertising agencies must ensure they comply with these rules to avoid warnings, lawsuits, or fines.
This article provides a comprehensive overview of the key aspects that must be considered when advertising in Germany and highlights potential risks for advertising agencies and companies.
Basics of Advertising Law in Germany
The legal basis for advertising in Germany is primarily the Law Against Unfair Competition (UWG). Its goal is to ensure fair competition and protect consumers from misleading or aggressive advertising.
Key principles include:
- Fairness in competition: Companies must not gain unfair advantages over competitors by misleading consumers with false or deceptive statements.
- Consumer protection: Advertising must not create false expectations and must provide clear and transparent information about products and services.
Legal Issues with Advertising Claims
Advertising claims are often at the center of legal disputes. Some of the most common legal issues are:
a) Misleading Advertising
The UWG prohibits misleading advertising that deceives consumers. A classic example is the misrepresentation of price reductions. The European Court of Justice (ECJ) has clarified that any advertised price reduction must be based on the lowest price in the last 30 days. This means companies cannot artificially inflate prices for a short time only to later advertise a false discount.
Companies must also be cautious when using terms like “acute” in medications. For instance, the Munich Regional Court I ruled that the term “acute” can only be used if an immediate effect is expected. In one case, a heartburn remedy that only worked after several hours was found to be misleading when advertised as “acute”.
Further Examples of Misleading Advertising:
- Eye-Catching Advertising: This type of advertising highlights certain aspects of a product or service to grab consumers’ attention. Problems arise when the eye-catching element distracts from important limitations. Advertisers must ensure that all conditions are clearly and understandably presented to avoid misleading consumers.
- Advertising with Self-Evident Facts: It is illegal to advertise features that are legally required or generally expected. An example would be promoting a product as “CE certified.” Since this is a legal requirement, such advertising can be considered misleading.
- Advertising with Guarantees: Guarantees that offer benefits already legally required may also be deemed misleading. For instance, the Essen Regional Court ruled that advertising a “5-year guarantee” is unlawful if it doesn’t clearly state that consumers’ legal warranty rights remain unaffected.
- Delivery Times: False delivery claims are another common pitfall in advertising. Promising fast delivery times that cannot realistically be met is deceptive. Companies must ensure that advertised delivery times are accurate and achievable.
- Bait-and-Switch Offers: Bait offers, where products are advertised at very low prices but not available in sufficient quantities, are also unlawful. It is deceptive if the company does not intend to sell the advertised product in the advertised quantity at the stated price.
b) Comparative Advertising
Comparative advertising is allowed as long as it is objective and factual. However, it becomes problematic if competitors are disparaged or misleading comparisons are drawn. In such cases, companies may face warnings from competitors who feel their market presence is being unfairly compromised.
c) Health-Related Claims
Strict regulations apply, particularly in the health sector. Health-related claims without scientific backing can be considered misleading and therefore illegal. The Essen Regional Court prohibited a dentist’s advertisement claiming prices were “significantly cheaper than online,” as this was not backed by credible comparison.
Risks for Advertising Agencies Involved in Unlawful Advertising
Advertising agencies that create unlawful ads for their clients can also be held liable. This is especially true if they actively contribute to developing the advertising strategy. In some cases, agencies can even be seen as joint tortfeasors if they fail to properly review the legality of the content they disseminate.
a) Liability as a Joint Tortfeasor
If an advertising agency disseminates unlawful content without adequately checking its legality, it may be held accountable. The OLG Hamm case on misleading advertising for condoms illustrates how carefully agencies must work. Although the court ruled that the deception was not significant enough to be relevant for consumers, similar cases could pose legal problems for agencies.
b) Warnings and Cease-and-Desist Declarations
Warnings and the associated demands for cease-and-desist declarations are common consequences of unlawful advertising. Advertising agencies should ensure compliance with all legal requirements to avoid costly legal disputes.
Consequences of Running Unlawful Advertising
Running unlawful advertising can have significant legal and financial consequences:
a) Warnings and Compensation Claims
In cases of unlawful advertising, competitors or consumer protection organizations may issue warnings. The companies or advertising agencies being warned usually must provide a cease-and-desist declaration and pay compensation.
b) Competition Lawsuits
If the unlawful advertising is not stopped, competition lawsuits may follow. These can lead to significant costs and may result in injunctions against the advertising. Additionally, the court may impose a fine.
c) Reputational Damage
Beyond the legal consequences, running unlawful advertising can result in significant reputational damage. Consumers who feel deceived may lose trust in the advertised company.
Conclusion
Advertising in Germany is subject to strict legal requirements, which both companies and advertising agencies must adhere to. Misleading advertising claims, comparative advertising, and price promises are particularly risky and should be carefully reviewed. Advertising agencies have a duty to understand the legal framework to avoid being held liable themselves. Violations can result in warnings, compensation claims, reputational damage, and lawsuits.
To navigate the dynamic legal landscape, advertising agencies and companies should work closely with legal experts to minimize the risk of violations.
Our law firm specialises in criminal defence, white-collar crime and IT law / technology law. Note our activity in digital evidence in IT security and software law.
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