01. October 2009

Competition Law

The publishing house distributing the newspaper, “BILD” (plaintiff), and the publishing house distributing the newspaper, “Die Tageszeitung” (TAZ) (defendant), argued about the admissibility of a comparative advertisement:

The German Federal Court of Justice once again dealt with the question of where the limits to amusing comparative advertising are to be set. For the assessment of the admissibility of comparative advertising, the Federal Court of Justice once more observed that it aimed at a hypothetical average consumer who is reasonably well-informed and circumspect and who is increasingly used to amusing and ironic statements in advertising. In this connection, the Federal Court of Justice explained that an amusing or ironic allusion to a fellow competitor or their products only represented an inadmissible disparagement if it made them look ridiculous or was taken literally, and was therefore understood to be a degradation of the addressee.

Facts:
The defendant promoted the TAZ newspaper with a movie commercial. In the first part of the commercial, an empty magazine rack carrying the logo of the BILD newspaper can be seen in front of a newspaper kiosk referred to as “Trinkhalle”. A customer who is dressed only in an undershirt and sweat pants asks the kiosk owner: “Charlie, da usual paper”, to which the owner replied: “None left, buddy”. On inquiry by the customer: “WHAT? None left?”, the kiosk owner placed a TAZ on the counter, without a word. The customer reacts with the words: “What the heck…? Are ya kiddin’ me, mate?” and after a short glimpse into the newspaper throws the TAZ back onto the counter. Then, the kiosk owner takes a BILD from below the counter, which he had hidden there, and passes it to the customer, whereupon both burst out laughing. In the second part of the commercial, a magazine rack filled with BILD newspapers can now be seen in front of the “Trinkhalle”. The customer asks: “Charlie, my TAZ”. The kiosk owner is so perplexed that he does not comply with this request. Now, the customer breaks into laughter, which the kiosk owner joins in. At the end of both parts of the commercial, the following text is shown:
“TAZ is not for everybody. That is OK”.

The plaintiff considers the commercial to be unfair comparative advertising pursuant to § 6, sec. 2, no. 5 UWG (German Act on Unfair Competition), and therefore lodges claims against the defendant requesting an injunction, information, as well as a determination of the defendant’s liability for damages. Anyone promoting their products by means of comparative advertising takes unfair action according to this regulation if the comparison degrades or tarnishes the image of the products of the fellow competitor.

The Regional Court and the Court of Appeal have largely upheld the complaint. The court of appeal ruled that the defendant overstepped the limits of what is admissible in competition with the commercial, even though it was marked by humour, irony and sarcasm. The court also held that the defendant tried to advertise their newspaper by drawing an unflattering picture of the desolate social structure and the (missing) intellectual abilities of a typical BILD reader. Thus, the defendant disparaged the readers and the newspaper of the plaintiff without any good or well-founded reason.

Following the defendant’s appeal, the Federal Court of Justice reversed the decisions of the lower courts and dismissed the action. According to the Federal Court of Justice, the commercial of the defendant is not anticompetitive. The commercial merely expresses that the TAZ “is not for everybody”, i.e., it does not appeal to the broad public. The average viewer knows that the commercial is an amusing exaggeration designed to attract the addressee, and that the commercial does not disparage the BILD newspaper or its readers in general.

Download the full text of the decision I ZR 134/07 “Gib mal Zeitung!” of the BGH of October 1, 2009 under: