Advertising in Germany: Comparing to Competitors
by ZELLER & SEYFERT
Despite the international reach of social media marketing and the potential reach of global advertising, individual promoters and companies need to be wary of potential pitfalls, including liability as a result of breaching local jurisdictional rules. Legal advertising in one country may create liability or violate advertising laws in another. A good example of this is the ability to compare products with competitors (“vergleichende Werbung”). Explicitly or implicit identification of a competitor of goods or services in advertising is considered comparative advertising and is restricted in most cases.
No such thing as the “Pepsi Challenge” in Germany
As opposed to the U.S. comparative advertising has been banned in Germany for many decades. An example of how this might work differently in the U.S. was the Pepsi challenge where participants were asked to compare the flavors between Coke and Pepsi products, even showing the labels and trademarks to viewers. While this marketing strategy was effective in the U.S., it would have been prohibited and considered offensive by European standards.
For decades the German Federal Court of Justice established that comparative advertising was prohibited except when there was “sufficient occasion” for the comparison. In effect, there were only a few cases where this applied including:
- Comparisons in response to an explicit and individual request from a customer, for example (an information-related comparison)
- Comparisons to explain a technical advancement that would otherwise be difficult to demonstrate (an innovation-related comparison)
- Comparisons to defend against an unlawful attack (a defense-related attack)
Even in these limited exception cases, courts required that the comparisons be “within the bounds of necessity” regarding nature and scope. As a result of such limited exceptions and a narrow use-case, most German companies found it impossible to design their marketing strategies around comparative advertising. In general, comparative advertising in Germany tends to be avoided however, there are some instances where it may be effective and permissible.
European “Comparative Advertising Directive”
A European Directive takes a broader, more inclusive, and positive position on comparative advertising. The intention of this directive was to provide consumers with truthful and objective comparisons while also stabilizing the imbalance between the member states regarding the legislative discrepancies, which the Union viewed as detrimental to the market. In effect, this directive gives permission to German, European, and international businesses broader permissions to make truthful and objective comparisons, provided that other requirements are met. This directive was implemented by Germany’s Unfair Competition Act and contains the provisions regarding comparative advertising.
Impermissible comparative advertising.
Advertising is considered comparative with the message is directed at a particular competitor, even if that competitor is not identified by name. Price comparisons between distributors are also considered comparative advertising. Here are a few more examples of advertisements that are not permitted in Germany:
- Advertisements that create confusion between products, trademarks, or design
- Ads that exploit or detract from the reputation of their competitor or their trademarks
- Imitations or presenting one’s product as an imitation of another which is protected by trademark
Is comparative advertising ever permitted in Germany?
Comparative advertising may be permitted if certain conditions are met. A comparison that draws attention to the differences between products can be informative and useful if the products function in “an identical manner.” Comparisons must also be material, relevant, verifiable, and representative. This means that, of course, the features must be material and relevant from the consumer perspective. Verifiable means that any claims must be backed up with statistics or evidence. Comparing taste or aesthetic features cannot be proven so it is not permitted
Examples of permitted comparative advertising
- Advertising that generally asks consumers to make a comparison
- Advertising that is couched in general terms that do not refer to competitors, even though it highlights the virtues of a product, with the implication that competitors cannot offer the same advantages
- Superlative-type advertising (“Alleinstellungswerbung”) that does not actually refer to competitors or products
Creating advertisements or protecting a trademark against comparisons
Whether you are creating an advertisement for a new service or product or you want to protect your business against trademark use or comparative advertising, our firm can help. We are experienced in handling a range of cases around advertising and trademark infringement. In addition to helping you create advertisements in compliance with German law, we can also help you adapt foreign or international advertisements, integrate a European advertisement for a German market, or defend your company against any unlawful comparative advertising in Germany.
Please contact Atty. Dr. Christian Seyfert, LL.M. for any support with your competition law issues. You may reach him via e-mail (email@example.com) or on +49 69 58 80 972-40 (Frankfurt am Main) or +49 30 40 36 785-80 (Berlin).
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