OGH: Unfair Competition after Concealment of Circumstances

Jun 23, 2023 Benn-Ibler Rechtsanwälte

Does the claim ‘The brand most recommended by the leading dishwasher manufacturers’ constitute unfair competition? This was the question to be decided by the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) after a manufacturer of dishwasher products had sued for injunctive relief.

The parties to the dispute are manufacturers of dishwasher products. The defendant advertises its product claiming that the product is the most recommended brand by top dishwasher manufacturers. The claimant requested that the defendant cease and desist from advertising its product as the most recommended brand by top dishwasher manufacturers unless the defendant identify the factors and criteria on which this recommendation was based, in particular whether it was based on objective tests.

The lower courts had dismissed the claim because they believed that the advertising statement in question was not misleading. Consumers would not expect such an explanation as demanded by the plaintiff. The plaintiff then filed an extraordinary appeal, and the OGH granted the appeal.

Generally, a business practice is considered misleading if it contains incorrect information. In this regard, the OGH held that a statement is considered incorrect if it proves to be untrue and the expectations of the persons addressed do not correspond to the actual circumstances. This requires taking into account how an average informed and reasonable consumer would understand the advertising in question. In this case, the advertising statement suggested that the advertised products were actually better than comparable products as shown by recommendations from leading dishwasher manufacturers. The OGH held that if this superior product quality was not clearly recognisable, clarification of the factors and criteria of the recommendation was required in order to avoid misleading consumers.

The defendant was thus required to prove that its claim of top ranking was based on objective tests. As the lower courts had not issued any instructions in this regard, the case was referred back to the court of first instance to clarify this matter and to reassess the issue of misleading advertising.

OGH 4 Ob 190/22b (25.04.2023)