Concept and legal classification of “Zugabe” (free gift/premium)
Definition of Zugabe
The term “Zugabe” refers in a legal context to a gratuitous additional service or item granted upon the purchase of a main product or service. In principle, this constitutes a monetary benefit that the seller voluntarily provides to the buyer over and above the object of the contract itself. The term is used particularly in competition law, commercial law, and occasionally in consumer law.
Historical development of the law on premiums
Over the course of the 20th century, the practice of giving Zugaben was regulated in particular by the Zugabengesetz (Act Against Premiums in Business Transactions of March 7, 1932), which until 2001 primarily governed the permissibility of promotional gifts and other voluntary additional benefits. The objective of the law was to prevent a ruinous competition through ever more valuable Zugaben and thus stabilize the market. With the abolishment of the Zugabengesetz in 2001, a central special provision in competition law was removed, so that general unfair competition law (UWG) now governs the assessment of Zugaben.
Zugaben in competition law
Regulations under the Act Against Unfair Competition (UWG)
With the abolishment of the Zugabengesetz, the granting of Zugaben is now predominantly governed by the Act Against Unfair Competition (UWG). The decisive provision is § 3 UWG, which prohibits unfair commercial practices if they are likely to significantly affect the interests of competitors, consumers, or other market participants.
Unfair commercial practice
A Zugabe may be deemed unfair if it, for example, deliberately distorts competition or exerts undue influence on consumers. According to § 4 UWG, specifically misleading or aggressive business practices are also prohibited, which also applies to the use of Zugaben.
Misleading through Zugaben
According to § 5 UWG, deception occurs if false statements are made about the type, value, or components of the Zugabe. The key point is that advertising with a Zugabe must not mislead the consumer about the actual value or purpose of the additional benefit.
Impact on freedom of decision
A Zugabe may become legally relevant in particular if its granting is likely to influence the consumer’s free and informed purchasing decision. The economic significance of the Zugabe and its relation to the main product must be taken into account.
Zugaben in commercial law
Zugaben in sales law
Under sales law, Zugaben are considered ancillary services in the absence of specific regulations, provided they become part of the sales contract. A distinction must be made between a true (not contractually agreed, therefore voluntary) Zugabe and a contractually agreed ancillary service.
- True Zugabe: Granted by the seller at their own initiative together with the main product, without the buyer having a legal claim to it.
- Agreed ancillary service: Explicitly stipulated in the contract; there is a right to fulfillment.
Significance for warranty
Within the scope of warranty rights, a Zugabe may form part of the contractual object if it has become part of the contract expressly or implicitly. If the Zugabe is considered an ancillary service, it is subject to the same statutory warranty provisions as the main object.
Zugaben in consumer protection
Duty to inform and transparency
Consumer law prescribes certain information obligations when selling goods and services (§ 312d BGB in conjunction with Art. 246 EGBGB). When offering Zugaben, the provider must provide clear and understandable information about the conditions for the Zugabe. Unclear or misleading statements regarding the type, value, or attainability of the Zugabe may constitute a violation of consumer rights.
Coupling ban and exceptions
There is no longer a coupling ban in the strict sense in German law following the repeal of the Zugabengesetz. Nevertheless, coupling the main service and Zugabe to certain conditions is inadmissible if it results in an unreasonable disadvantage to the consumer, for example under §§ 307 et seq. BGB in the use of standard terms and conditions.
Tax and civil law aspects of Zugaben
VAT treatment
The VAT treatment of Zugaben depends on their classification. As a rule, Zugaben are subject to VAT if they are provided as part of a paid exchange of services and are associated with the main service.
- Free Zugabe: If the Zugabe is granted without consideration, it may be considered as own consumption subject to VAT (§ 3 para. 1b UStG).
- Part of the consideration: If the Zugabe is closely linked to the sales contract and the main service, its value is included in the tax assessment.
Civil law assessment
In civil law, a Zugabe is to be classified as a gift or as part of a contract. If the Zugabe is contractually agreed, the provider is liable within the statutory framework. If it is merely a voluntary gift, the corresponding provisions of §§ 516 et seq. BGB apply.
Zugaben in competition and advertising law
Special regulations and industry-specific differences
In certain industries, additional special rules apply, for example for pharmaceuticals, tobacco products, or alcoholic beverages. Here, Zugaben may be restricted or prohibited by special laws (e.g., Medicines Act, Tobacco Products Act).
Zugaben and Price Indication Ordinance
The Price Indication Ordinance (PAngV) requires that when advertising products with Zugaben, the total price of the offered goods or service must be clearly stated. Manufacturers and retailers are obliged to observe price accuracy and price transparency to prevent distortion of competition.
Case law on the admissibility of Zugaben
Recent case law
According to the established case law of the Federal Court of Justice (BGH), the granting of Zugaben is generally permissible as long as it does not constitute an unfair competitive practice under the UWG. An exception exists particularly if the Zugabe is likely to be misleading or to exert undue influence on the consumer. Courts particularly consider the type and value of the Zugabe as well as the specific circumstances of the individual case.
Summary
The legal assessment of Zugaben requires a nuanced analysis, taking into account general unfair competition law, the provisions of sales and consumer law, as well as tax and competition law regulations. Following the abolition of the Zugabengesetz, the UWG in particular sets the standards for the permissibility and limits of Zugaben in commercial practice. Exceptions and special regulations mostly exist for highly regulated sectors. Providers should always observe the statutory requirements concerning transparency, misleading practices, and unfair competition to avoid legal risks.
Frequently asked questions
When is the granting of a Zugabe permitted under § 7 HWG?
The permissibility of a Zugabe under § 7 German Drug Advertising Act (HWG) requires that it is granted in connection with the sale of pharmaceuticals, medical devices, procedures, treatments, items, or other means that are legally protected. According to the law, any Zugabe is impermissible unless it exceptionally falls within one of the statutory exceptions. These include, for example, items of negligible value, customary ancillary items, rebates permissible in scope, free samples for advertising purposes, and promotional gifts, provided they cannot be expected to unduly influence the purchasing decision. The legal assessment of a Zugabe always depends on its objective value, its potential to influence, and its intended purpose in connection with the main product, taking into consideration consumer protection and fair competition. In particular, the prohibition on Zugaben applies across industries to doctors, pharmacists, and pharmaceutical companies alike if they operate in the German market.
How is a “low-value item” legally defined and assessed?
A “low-value item” is, according to § 7 para. 1 no. 1 HWG, a legally permissible premium. Legally, a low-value item is assessed based on its objective market value, with case law usually applying a guideline of a maximum of 1 euro, sometimes up to 5 euros, depending on the circumstances (e.g., type of product and target group). Items such as pens, notepads, or pocket calendars generally fall within this value. The standard of value is guided by the threshold for trivial matters and the aim that there should be no noticeable influence on the medical or pharmaceutical decision-making process. The establishment of the market value must also be demonstrably documented. If the Zugabe exceeds this value threshold, it is generally no longer permissible and may be subject to warnings or sanctions.
What legal consequences can result from violations of the prohibition on Zugaben?
Violations of the prohibition on Zugaben under § 7 HWG regularly constitute an administrative offense and can be sanctioned with fines. In addition, anti-competitive conduct within the meaning of §§ 3, 3a UWG (Act Against Unfair Competition) may exist, which can result in warnings and injunctive proceedings brought by competitors or consumer protection associations. If legal proceedings ensue, injunctive orders, cost obligations, and—in the event of repeated violations—significant administrative fines may be imposed. Licensed healthcare professionals also face professional sanctions, such as disciplinary action or warnings from the relevant chambers. In severe cases, this can result in the revocation of a professional license.
What legal exceptions to the prohibition on Zugaben apply specifically in the pharmaceutical sector?
In the pharmaceutical sector, the HWG provides for various statutory exceptions: In addition to low-value items, customary ancillary items (i.e., Zugaben typically provided in business transactions that do not present a special incentive), rebates or refunds, as well as free samples for advertising purposes, are permitted. However, these exceptions require that the risk of improper influence on the prescriber or supplier is ruled out. Furthermore, the ban on unreasonable or improper influence remains unaffected. So-called “genuine” and “non-genuine” promotional gifts must withstand strict scrutiny; in particular, pharmaceutical companies and pharmacies may not offer advantages that distort competition or endanger professional independence in decision-making.
How does the prohibition on Zugaben affect discount promotions and bonus programs?
The HWG is generally critical of discount promotions and bonus programs in the provision of medicinal products, unless they are expressly permitted. Discounts and bonuses are allowed if they do not provide an excessive incentive that could impair healthcare provision and if the statutory exception rules (e.g., § 7 para. 1 sentence 1 no. 2 HWG) are observed. This particularly applies to pharmacies in the sale of prescription medicines. For prescription medicines, according to current case law and legal situation, granting discounts and bonuses is generally inadmissible, even if the economic value is minor. Only non-prescription medicines may receive industry-standard discounts, provided these do not create an improper incentive.
What role does the intended advertising purpose play in assessing the permissibility of Zugaben?
The advertising purpose of a Zugabe is central to its legal assessment: According to the HWG, all incentives connected to a sales-promoting purpose must be critically examined. If it is apparent that a Zugabe is intended to influence the decision for a particular product (e.g., by prominent placement, advertising logos, or accompanying promotional material), it is, according to the meaning and purpose of the law, more likely to be prohibited unless an exception applies. The law seeks to prevent undue influence and, in particular, to safeguard medical independence. Case law draws a very fine distinction between incidental minor gifts and those incentives specifically used as a purchase incentive. In cases of doubt, the nature and intensity of the advertising purpose as well as the relation to the main product are decisive for the legal assessment.
