The Bundesgerichtshof Hears Out Netto's Dispute Over Deceptive Advertising
Advertising Decision on Price Cuts Pending by BGH - BGH engages in discussions over cheaper promotional deals
Staying loose and friendly, let's dive right in!
The dogged Office for the Suppression of Unfair Competition has taken issue with Netto's advertising tactics, deeming them misleading. Consequently, they filed a lawsuit for an injunction, with the Higher Regional Court of Nuremberg largely siding with them in 2024. The court criticized the lack of clarity concerning the extent of the price reduction in Netto's advertising, labeling it deceptive. Netto appealed the verdict and is now standing before the Bundesgerichtshof (BGH).
Meanwhile, in September 2024, the European Court of Justice (ECJ) made a landmark decision, stating that any advertised price reduction should be calculated based on the lowest price during the past 30 days. This ruling could значительно влиять на дело Netto.
Insights from the ECJ Rulings on Price Reductions and VAT Adjustments
- ECJ and VAT Adjustment Rules (June 2025) The ECJ has recently drawn a line on VAT adjustment rules related to price reductions or discounts implemented after a transaction. Adhering to Article 90 of the EU VAT Directive, they've underscored the importance of proportionality when reducing the taxable amount for VAT following discounts, ensuring VAT neutrality and fairness.
- Relevant EU VAT Directive Articles (June 2025) The EU VAT Directive articulates when and how VAT adjustments should be executed to reflect actual transaction values after price reductions or discounts have taken place. Articles 90, 184, and 186 provide that entities have the right to adjust their initially declared VAT amounts if discounts or reduced prices occur after the initial supply, fostering a climate of fairness and accuracy.
- Implications for Pricing and Customs Valuation (May 2025) Though primarily addressing VAT, the ECJ's ruling in the Tauritus case also highlighted the significance of objective, quantifiable factors and agreed pricing mechanisms when determining transaction values. The court recognized the legitimacy of temporary prices with subsequent adjustments based on agreed-upon formulas or market indices, provided they are well-documented.
Possible Implications for the Netto Case
- The ECJ's principles on transparent and factual price calculations will likely have a substantial impact on the BGH's evaluation of Netto's advertising practices. The main concern will be if the reduced price claims in Netto's advertising comply with these standards, ensuring their accuracy is based on fair and verifiable data.
- If it's discovered that Netto's advertising price reductions were based on ambiguous or subjective calculations, the BGH might rule against Netto or mandate clearer, more transparent disclosure adhering to the ECJ's guidelines on price determination and VAT neutrality.
Current State of Affairs
- Alas, as of June 2025, there's been no reported final decision or update concerning the BGH's ruling with regards to Netto's advertising post the ECJ's latestprice reduction calculation clarifications. However, the ECJ's rulings serve as a guiding legal framework that the BGH and other German courts are expected to apply when evaluating cases involving pricing and VAT adjustments.
- With the ball in Netto's court, it's crucial for the company to revise its advertising and pricing strategy to be in line with the ECJ's principles, guaranteeing their transparent use of discounts and reduced prices with objective metrics and documented agreements.
Stay tuned as we follow the developments in this fascinating case!
- In the context of the Netto case, the Bundesgerichtshof (BGH) might consider negotiating a reduced price for the company's advertising, given the European Court of Justice's (ECJ) emphasis on transparent and factual price calculations.
- The ECJ's guidelines on pricing and VAT adjustments could significantly impact Netto's business operations, encouraging the company to revise its advertising and pricing strategy with clearer, more objective, and verifiable data.
