Misleading claims fall foul of competition law
Beer is not all fun and games. That was certainly the position of Munich’s regional court – the Landgericht (LG) München – with respect to a bottle label whose statements about the product’s origin and climate neutrality were rather economical with the truth. Given their potential to mislead consumers, the court ruled in a judgment from December 8, 2023, that the claims were in breach of competition law and that the relevant advertising be banned (case no.: 37 O 2041/23).
Geographical indications of origin can evoke certain associations in the minds of consumers regarding the quality or taste of a product and hence influence their purchasing decisions. That is why it is so important that consumers not be misled as to the geographical origin of a product, explains commercial law firm MTR Legal Rechtsanwälte, whose practice includes IP law as well as antitrust and competition law.
Consumers misled by inaccurate statements about product’s origin
Unfortunately, the LG München came to that very conclusion, i.e., that consumers were being misled, in the case at hand. The defendant, a trading company, had been citing a Munich address well known for its breweries on the labels of its beer bottles, when in fact this is just the location of the company’s administrative headquarters and the beer is not actually brewed in Munich. One competition association did not take kindly to this bitter reality, viewing it as an attempt to deceive consumers about the beer’s origin. The association also took issue with some of the claims used to promote the beer, such as “climate neutral production” and “CO2 positive”.
The complaints were well received by the LG München, which ruled that featuring the relevant address known for its breweries on the labels of the bottles was liable to mislead consumers by giving them the impression that the beer is produced there, even though the production site is located elsewhere and this is just the location of the trading company’s headquarters. This kind of misdirection concerning the origin of the beer was said to have the potential to influence consumers’ purchasing decisions.
Greenwashing – Climate neutrality claims must be backed up by evidence
The court also found the claims “CO2 positive” and “climate-neutral production” to be unlawful for misleading consumers. The company ought to have presented the evaluation criteria for this assessment on the label in a sufficiently transparent manner, but it had failed to do so. A QR code redirecting the user to more detailed information did not cut it in the eyes of the LG München. Faced with potential accusations of greenwashing, the company should have informed consumers transparently about how climate neutrality was being achieved here. This was not evident even from the information on the company’s homepage, according to the court.
The LG München’s ruling illustrates the fine line between legitimate advertising and misleading consumers. These kinds of violations of competition law can lead to formal warnings, injunction suits, and claims for damages. It is therefore vital to seek expert legal counsel when in doubt.
MTR Legal Rechtsanwälte advises on both IP law and antitrust and competition law.
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