Case Law: Case C-470/93, Verein gegen Unwesen in Handel und Gewerbe KöLn eV v. Mars GmbH, 1995 E.C.R. 1-1923

1 Colum. J. Eur. L. 523 (1995)

Elke Ballon. Assistant, Study Center for Consumer Law, Katholieke Universiteit Leuven, Advocate.

Free Movement of Goods; Measures Having an Effect Equivalent to Quantitative Restrictions; Presentation of a Product Likely to Restrict Freedom to Fix Retail Prices and Mislead the Consumer

Facts and Procedure

Mars GmbH, a German company belonging to the American group Mars Inc., marketed ice-cream bars of the Mars, Snickers, Bounty and Milky Way brands in Germany. These ice-cream bars were imported from France, where they were produced and packaged by McLean, another company belonging to the Mars group. As part of a European publicity campaign, the quantity of each ice-cream bar was temporarily increased by 10%. This was advertised on the wrappers, these being partly colored and bearing the marking “10%.”

The Association against Improper Practices in Trade and Businesses, (Verein  gegen   Unwesen   in  Handel und     Gewerbe, hereinafter “the Association”) sought an injunction against the Mars company before the Landgericht Köln (Regional Court Cologne) in order to prevent the “10%” marking from being used in Germany.

Proceedings were brought both under paragraphs I and 3 of the Law on unfair Competition (Gesetz gegen den unlauteren Wettbewerb, hereinafter “the UWG”) which provided that improper competitive practices concerning the use of misleading information may be restrained.

The Association contended that the marking “10 %” on the wrappers would mislead consumers in two ways. Firstly, consumers would assume that, as part of the promotion, more of the product was being offered for the same price. If the retailers were in fact to increase the retail price, they would be taking advantage of the consumers’ expectations of getting more for their money. Thus to avoid causing such a deception, retailers would be bound to maintain the previous price. However, the latter situation would constitute a breach of paragraph 15 of the Act against restraints of competition (Gesetz gegen Wettbewerbsbeschränkungen   hereinafter “the   GWB”), which prohibits manufacturers from imposing prices upon retailers. According to the German law, agreements between companies restricting the freedom of one of the parties to fix prices in contracts concluded with third parties for the supply of goods are void.

Furthermore, the “10%” marking would give the impression that the product had been increased by a quantity corresponding to the colored part of the new wrapper, which was proportionally much more than ten percent of the total surface area of the wrapper. In the Association’s view, such an impression would mislead the consumer and therefore constituted an infringement of paragraph 3 of the UWG.

Before ruling on the substance of the case, the Landgericht Köln requested a preliminary ruling on the compatibility of the German prohibition with European law, namely the principle of free movement of goods. The German court asked whether goods lawfully produced and marketed according to a certain strategy in one Member State could be prevented from being similarly marketed in another Member State on the grounds that: (1) the new packaging is liable to give consumers the impression that goods are being offered for the same price as those in the old packaging, (2) the visual presentation of the new feature “10% ice-cream” gives consumers the impression that either the volume or the weight of the product has been considerably increased.