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Granting of Payback Points as an Inadmissible Advertising Gift

by Dr Christian Meyer

In the case at issue, the plaintiff, an association legally entitled to bring an action, sought an injunction under Paragraphs 8, 3 and 3a of the Law against Unfair Competition (UWG) in conjunction with Paragraph 7(1)(1) of the German Advertising in the Health Care System Act (HWG) and Paragraph 78(2), second and third sentences, and Paragraph 78(3), first sentence, of the AMG (German Medicines Act) to restrain the plaintiff's conduct, which was alleged to be anti-competitive.

Specifically, the defendant supplies pharmacies with pharmaceuticals and also operates the smartphone app "deine Apotheke" and offers its customers the opportunity to participate in the app. The defendant advertised the benefits of its app to end consumers with various advertising statements, including, among other things, the promise to grant 50 Paypack points for using the pre-order function via the app, which corresponds to an equivalent value of EUR 0.50.

The Mannheim Regional Court upheld the action (judgment of 25 February 2021, Case No. 25 O 37/20) and ruled that the granting of 50 Paypack points was an impermissible promotional gift.

The fundamental prohibition of advertising gifts regulated in Section 7(1) of the HWG is intended to protect consumers from improper influence. Gratuities or other promotional gifts (goods or services) are therefore prohibited, unless they are items of low value that are identified by a permanent and clearly visible label of the advertiser or the advertised product or both, or small items of low value.

Even though - undisputed between the parties - it is not possible to make a binding pre-order via the disputed app and a purchase contract for prescription medicines can only be executed in a subsequent step on site, the Regional Court affirmed that there is both sufficient product reference and the promotion of an incentive to dispense prescription medicines, among others, through the granted discount of 50 Payback points. In its reasoning, the Regional Court stated that the pharmacy customer with a medical prescription who contacts a local pharmacy via the app at issue and pre-orders the prescribed medication there, will, as a rule, not only subsequently purchase said medication at that pharmacy, but will also base their future behaviour on the fact that they will receive points equivalent to EUR 0.50 again the next time. The Regional Court also affirmed a noticeable impairment of the interests of consumers and competitors within the meaning of Section 3a UWG.

As the number of decisions on the HWG shows, advertising pharmaceutical companies are under constant observation by competitors and also by associations. The present judgement joins a list of decisions that increase the requirements for the advertising of corresponding products by pharmaceutical companies. Thus, Special attention should always be paid to the prohibition of advertising gifts according to Section 7 HWG discussed here.


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