A loss-leader offer is a violation of competition law. A retailer may not offer goods in its online store with the statement “only a few items in stock” and promise a short delivery time, even though the advertised goods are not available from a third party for delivery within the stated delivery time.
Goods no longer in stock – loss leader offer?
In summary proceedings before the Higher Regional Court of Hamm (decision of 11.08.2015, ref.: 4 U 69/15), a supplier of electric bicycles had offered a model in its online store with the information that only a few units were still in stock and stated the delivery time as approximately two to four working days.
In response to a competitor’s online order of the model from a customer for test purposes, the supplier informed the customer that the ordered bike was not in stock. The competitor therefore considered the online offer to be inadmissible “bait-and-switch advertising”.
Violation of the ban on bait-and-switch offers
The Higher Regional Court of Hamm qualified the advertising as a bait-and-switch offer and thus confirmed the infringement of competition law. The retailer’s internet offer violated the ban on bait-and-switch offers within the meaning of No. 5 of the blacklist in the annex to Section 3 (3) UWG:
Impermissible commercial acts within the meaning of Section 3 (3) are […]
No. 5 Offers of goods or services within the meaning of Section 5a (3) at a certain price if the trader does not state that he has reasonable grounds for assuming that he will not be able to provide these or similar goods or services or have them provided in reasonable quantities for a reasonable period of time at the stated price (bait offers). If the stockpiling is shorter than two days, it is up to the trader to prove that it is reasonable;
According to the judges, this prohibition also applies to product presentations on the Internet that invite a customer to submit a specific offer.
With its online offer, the retailer had violated the ban on bait-and-switch advertising. He neither had the requested electric bike in stock nor was he able to procure it at short notice.
By stating that “only a few items are still in stock”, the customer is not sufficiently informed about the lack of stock. On the contrary – the notice should be understood to mean that the provider actually still has the corresponding goods (albeit only a few). Moreover, the customer is even encouraged by the notice not to wait too long before making a purchase decision.
Constant updatability
In the opinion of the Senate, particularly high demands must be placed on the accuracy of the content of Internet offers with regard to the availability of goods, as offers on the Internet – unlike offers in a printed catalog, for example – can be constantly updated.
However, it also means that the reference to “few copies available” should not be classified as a bait-and-switch offer.