Austrian OGH on Misleading Price Advertising

Mar 28, 2025 Benn-Ibler Rechtsanwälte

In the case at hand, the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) was called upon to determine whether the defendant company’s practice of advertising smartphones as costing ‘EUR Zero’ was permissible, despite the fact that the company had consistently levied a storage media levy of EUR 3.

In the case at hand, the plaintiff is a consumer protection organisation with legal standing; the defendant is a provider of telecommunications services operating throughout Austria.

In its online shop, the defendant advertised ‘Smartphones for EURO ZERO’, with an asterisk footnote which, after scrolling down, told the reader that there would be a copyright levy (‘*add. EUR 3 copyright levy per smartphone’). In addition, a storage media fee and a service fee were referred to at various points in the online ordering process, sometimes broken down into one-off, monthly, and annual costs.

The plaintiff brought several actions for injunctive relief under Section 2 of the Austrian Act against Unfair Competition (Gesetz gegen unlauteren Wettbewerb, hereinafter UWG).

The OGH came to the following conclusion with regard to point 20 of the Annex to the UWG and the storage media levy:

According to Item 20 of the Annex to the UWG, describing a product by using the expressions ‘at no charge’, ‘at no cost’, ‘free’ or the like, when the person to whom the product is sold has to pay for things in excess of the inevitable costs of responding to the commercial transaction and collecting or paying for delivery of the product.

The misleading nature of an advertisement must be assessed on the basis of the overall impression given by the advertisement. However, the overall impression is not the same as the overall content of the advertisement. An end user who is reasonably well informed and reasonably observant will not, when using a service expressly described as ‘free of charge’, assume that the small print may mention hidden surcharges, although the product was advertised as free of charge, which had been expressly emphasised in the eye-catching advertisement.

Due to the eye-catching announcement that certain smartphones were available from the defendant business ‘for zero euros’, potential customers could indeed expect to receive a free smartphone product. This eye-catcher was in no way qualified in such a way as to create a different overall impression from the outset.

As a result, the defendant was prohibited from advertising a product as free of charge if natural persons would have to pay a storage media fee of EUR 3.

OGH 4 Ob 76/24s (17 December 2024)