A drug store chain advertised that its branches would honour 10% discount coupons issued by rival drug stores. They were sued by the German Centre for Protection against Unfair Competition, Wettbewerbszentrale, mainly on grounds of deliberate obstruction of competitors under Sec. 4 No. 10 UWG 2004 (now Sec. 4 No. 4 UWG 2015). The claimant argued that the defendant’s advertisement was intended to usurp the competitors’ advertising activities, take unfair advantage of them by freeriding and prevent their success.

The District Court and the Court of Appeals unanimously rejected this was a violation of Sec. 4 No. 10 UWG. The Federal Court of Justice has confirmed this decision and, according to a press release, (the only published document so far) agreed with the views of the lower courts:

The Court found this commercial practice does not involve a legal deliberate obstruction of competitors. The defendant does not put itself between the competitors and their customers by its advertisement, as the customers do not automatically become customers of the competitors merely by receiving coupons from them. Nor did the defendant harass or pressure the customers, as the announcement was only factual information. The aspect which finally convinced the courts of the lawfulness of the advertising practices was that it remained solely up to the consumers whether they would redeem the coupons from the advertising drug store, the defendant, or not at all.

Practical comments

The decision addresses the indefinite scenario of “deliberately obstructing competitors” and makes it clear once more that not every practice is necessarily unfair which, is disadvantageous for a competitor. To be obstructive, the activity not only has significantly to disadvantage the competitor. It also has to be specifically intended to hinder competitors in developing their business, thereby driving them out of the market; or the obstructive practices have to result in the competitors no longer being able by their own efforts, properly to bring their services to the market.