A hearing care professional operating throughout Germany advertised on the Internet with the crediting of PAYBACK points. Each euro of sales was supposed to correspond to one PAYBACK point worth one cent. The BGH has now ruled that the value limit for such low-value trifles in advertising to the public through promotional gifts for medical products is €1.
Why did advertising with Payback points end up in court?
A hearing aid company operating throughout Germany advertised online with the crediting of PAYBACK points for every purchase of a hearing aid. One PAYBACK point worth 1 cent was to be credited for every euro spent. The Centre for Combating Unfair Competition took legal action against this. It was of the opinion that such advertising for medical products violated Section 7 (1) of the German Drug Advertising Act (HWG).
LG and OLG Hamburg on advertising for credit notes
The HWG restricts the advertising of medicinal products and medical devices in order to protect consumers. Section 7 (1) HWG also prohibits gifts and other promotional gifts, unless they are small items of low value. Until now, it has not been clear where the limit for such small items of low value lies.
The Hamburg Regional Court had dismissed the action in full in its judgement of 12 May 2021 – 312 O 306/19 and therefore did not have to comment on the issue.
In the appeal before the Higher Regional Court of Hamburg, the Senate amended the decision of the Regional Court of Hamburg in its judgement of 29 February 2024 – 3 U 83/21. The Higher Regional Court of Hamburg dismissed the plaintiff’s main claim, in which she sought a ban on a credit note worth more than €1. However, it ordered the defendant hearing aid retailer to refrain from issuing PAYBACK credits totalling more than €5 per purchase.
BGH on PAYBACK points – €1 as a clear limit
The plaintiff appealed against this to the BGH – with success. None of the exceptions provided for in Section 7 (1) HWG were fulfilled and the PAYBACK advertising was therefore inadmissible.
The BGH initially dealt with an exception for “amounts of money to be calculated in a certain way”, as the law states. In simple terms, this refers to direct price reductions on pharmaceuticals or medical products, i.e. typical retail discounts. However, this was not the case, as PAYBACK points can only be realised after they have been credited in any subsequent transactions. According to the Senate, there is a risk of unobjective motivation, as it is not the desired remedy that is being advertised, but rather advantages when purchasing other goods.
Therefore, only the exception of low-value small items could be considered. These were items of such low value that any improper influencing of the advertising addressees appeared to be ruled out. The BGH based its decision on the total amount of PAYBACK points granted per purchase and set the permissible limit at €1. The court based its decision on the fact that advertising aimed at the public, as in this case, can more easily influence its audience than advertising aimed at specialist circles. In addition, the design of the advertising made it more difficult for consumers to compare prices.
What advertisers must now bear in mind
Depending on who advertisers are targeting with their marketing expenditure, the permissible value limits for low-value small items may differ. In this respect, the ruling of the Federal Court of Justice is to be seen as a clarification of a “safe harbour” for advertising expenditure to the public. Contributions of up to €1 are permissible. If the value is higher than this, undue influence can no longer be ruled out.
However, if the advertising is aimed at wholesalers or a specialised audience, the upper value limit can also be €5. In the resulting corridor of €1 to €5, however, the permissibility of advertising gifts depends on the individual case.
We advise companies on permissible product advertising in the healthcare sector – please contact us.