Advertizments with Net Prices even to B2B Inappropriate When Open to B2C

Until recently, there was a lot of discussion going on about a business which is actually only for B2B, but where consumers can also purchase. The BGH gave clarity to this query on April 29, 2010 (re I ZR 99/08).

Whoever sells to the public or advertises to the public must show the final price (§1 I 1 PAngV). The business may not appeal that it is exclusively targeting B2B customers and so is relieved of the duty of showing prices that contain VAT, service fees, other taxes, etc. This is so far so clear. However, this works only when addressing such businesses and not also private persons. The Federal Court of Justice set up high criteria for this determination.

The plaintiff admonished a car dealer because this merchant had not added VAT to his prices as shown in the Internet. Each offer showed the price without any reference to VAT and beneath the title description, the phrazes “price export-FCA” and “price-vendor-FCA” were shown. The plaintiff, a competitor, believed this to be unfair competition by violating pricing regulations and being misleading (§ 2 UWG). The car dealer defended himself that he only sold to commercial customers and not consumers. The remarks “price-vendor-FCA” clearly show that his customers were only businesses. Therefore, the rules on pricing were not applicable to him.

The BGH agreed with the plaintiff. The criticized advertisement also addressed consumers and was in consequence of that subject to Preisangabenverordnung (Ordinance on Price Quotations). The Federal Court of Justice’s decision also provides a delimitation of the advertisement’s alignment if consumer-oriented or not.

Relevant is:

• the consumer’s perspective if the advertisement (also) addresses him,
• internet offers accessible to everybody address at least also the consumer. This is however not true when offers clearly and unmisunderstandibly communicate  that the offers are exclusively for resellers.
• Even when the vendor clearly communicates his offers exclusively to other salesmen, he has to reasonably control that really only commercial accepters can purchase from him.

Against that, irrelevant is:

• to which persons he wants to address his adverizement,
• the vendor’s sole desire not to close any contracts with consumers,
• that the vendor really does not sell merchandise to the ultimate consumer,
• the usage of wordings that the average consumer does need to understand or does need to understand in order to determine that he is not being addressed.

In this case, the car dealer already failed to keep his offers open only to non-consumers. His cryptic wordings “price export-FCA” and “price-vendor-FCA” are irrelevant to show that his advertising is only to salespersons.

Remark

Case law sets a high level on the requirements when exclusively wanting to address commercial customers using net prices. You as the business person are expected to anticipate what the consumer will understand from your advertising and you must take out measures to make sure that no consumer “infiltrates” your business. Anyway, many businesses hate to read net prices and so need to work out themselves what they have to pay at the cash desk.