A businessman issued a press release about his company’s fundraising activities. In it, both the managing director of the company and a local politician were quoted verbatim in their statements. The press release thus put the company in a very positive light.

Shortly afterwards, a local newspaper published a report in which the company’s press release was reproduced almost verbatim. A competitor therefore sued for breach of competition law.

In the case of surreptitious advertising: invocation of freedom of the press inadmissible

The Higher Regional Court of Frankfurt am Main has now followed the competitor’s opinion. In its ruling of 22 August 2019 (case no. 6 W 64/19), the court classified the relevant article as unlawful surreptitious advertising in violation of competition law.

Editorial reporting is generally covered by the freedom of the press. However, this is only the case if it is objective and provides factual information. In the case at issue, however, this limit was clearly exceeded. This was because the report was an almost word-for-word copy of the company’s press release and therefore portrayed the company in an exaggeratedly positive light. The judges therefore found that the report clearly pursued a commercial purpose. Namely, the promotion of the sales of the company in question.

Labeling as advertisement or advertising necessary

Furthermore, it was not apparent to the reader that it was in fact a press release from the company in question. This is because the newspaper article had given the impression, particularly through quotes, that journalists from the local newspaper had conducted interviews with the protagonists mentioned. The article should therefore have been labeled as an advertisement.

However, because this was not done, the judges found that there was a commercial act whose commercial purpose was not made clear. At the same time, this was likely to induce the consumer to make a business decision that he would not have made otherwise. The behavior of the local newspaper was therefore considered unfair under Section 5a para. 5 UWG as unfair and therefore anti-competitive.

Press articles and advertising: consistently separate

In the case of editorial reporting, care must therefore be taken to ensure that the threshold for anti-competitive surreptitious advertising is not exceeded. Even in the case of “benevolent” or “positive” reporting, a factual distance to the subject of the report should therefore be maintained. Even self-praise – if present – should not be used verbatim. Otherwise it may be necessary to label it as advertising.