Caution is advised in relation to “best price” advertising claims. These may give a misleading impression of occupying a leading position in the market and violate competition law.
It is no secret that self-promotion is part and parcel of business as well as, of course, advertising. Promotional hyperbole is permissible as long as it does not go too far and amount to false claims asserting a leading position in the market. We at the commercial law firm MTR Rechtsanwälte note that claims of this kind mislead consumers and violate competition law.
A case in point is a ruling from June 21, 2019 by the Kammergericht (KG) Berlin, Berlin’s Higher Regional Court, in which the Court held that advertising claims promising the best price constitute misleading advertising if the promises cannot be fulfilled. These were said to constitute misleading claims asserting a leading position in the market (Az.: 5 U 121/18).
The defendant operates an intermediary platform for real estate agents. It promoted its services with, among other things, statements such as “sell at the best price”, “sell your real estate quickly and at the best price”, “the best price for your real estate”, and “best price achieved in 92% of cases”. The KG Berlin ruled that the defendant was not allowed to advertise with these statements, as they constituted misleading claims asserting a leading position in the market.
The Court held that a claim asserting a leading or unique position in the market can be said to exist if the content of the relevant statements is verifiable and does not consist merely of exaggerations. This was found to be the case here, because pricing information is a measurable variable. Accordingly, the Court ruled that best price promises of this kind might well be perceived by consumers as factual claims. It went on to state, however, that the defendant’s best price claims were untrue, since there was no apparent reason why the interested party with the best purchase bid would choose to come specifically to the internet platform in question; while a large platform may be helpful in this context, it cannot guarantee the highest purchase price. In addition, the KG Berlin noted that no benchmark exists for assessing whether real estate has, in fact, been sold at the highest possible price.
The Court also criticized the wording, “independent selection of certified real estate agents”, ruling that this gives the impression a selection is drawn up according to specific criteria and that the estate agents are in a position to negotiate the best price, when, in fact, no substantive checks according to quality standards take place when an agent is admitted to the portal.
While advertising is important for businesses, it can also easily overstep the mark. The consequences of this can include formal warnings, injunction suits and damages claims. Lawyers experienced in competition law can offer advice.