Defendant Penny receives physical courtroom reprimand
In a landmark ruling, the Landgericht Köln (Cologne Regional Court) has determined that discount store Penny violated Germany's Price Indication Ordinance by misleading customers with deceptive advertising practices. This decision sets a significant precedent for the legality of certain advertising practices in discount stores across the country.
The ruling, which took place on July 16, 2025, centres around a yogurt advertisement in Penny's brochures, which displayed a crossed-out price and a "-58 percent" label. The court found that this advertising method was misleading, as it did not base the percentage discount on the lowest price Penny had charged in the last 30 days, as required by law.
This case is not an isolated incident. Consumer advocates, including the Verbraucherzentrale Baden-Württemberg, have been actively challenging questionable advertising practices among discount retailers. Similarly, Aldi Süd, Lidl, Amazon, and potentially Netto have also faced legal issues related to price indications in their advertising.
The Price Indication Ordinance governs the regulations on price indications in advertising for discount stores in Germany. It stipulates that when showing a discount, the price before the discount must be a price that was actually charged in the last 30 days, and the percentage reduction must reflect the real price difference from that lowest previous price. Misleading price references, such as basing discounts on unverbindliche Preisempfehlungen (UVP, or recommended retail price) rather than real selling prices, are prohibited.
Penny is not the first to face legal consequences for violating these regulations. In another recent case, the company was sued for an advertisement for a chocolate bar, and they acknowledged an injunction request from consumer advocates. The brochures of Penny were criticised for not clearly stating which price applied to whom, further exacerbating the issue of deceptive advertising practices.
The court's statement confirms the complaints made by consumer advocates about the price indications in Penny's brochures. The ruling against Penny serves as a reminder to all discount retailers in Germany about the importance of advertising price accuracy and consumer protection against misleading price indications.
In the event of repeat offences, an administrative fine of up to 250,000 euros may be imposed. This week, the online retailer Amazon also suffered a defeat before the Munich Regional Court over price indications in their advertising, further emphasising the strict regulatory environment in Germany.
The Federal Court of Justice is currently examining a similar complaint by the Competition Centre against the discount store Netto. The Consumer Advice Centre of Baden-Württemberg, which filed the complaint that led to the legal dispute against Penny, has been actively involved in several recent legal proceedings related to price indications in advertising.
This ruling underscores the need for transparency and accuracy in advertising practices among discount retailers in Germany, ensuring that consumers are not misled by deceptive pricing strategies. Penny, along with other retailers, will need to examine the detailed reasoning of the judgement and decide on any steps they may take to ensure compliance with the Price Indication Ordinance moving forward.
In light of the ruling against Penny, discount retailers in Germany, such as Aldi Süd, Lidl, and possibly Netto, must take precautions to avoid misleading price indications in their advertising. This implies that the finance and retail sectors, including the industry of discount stores, must prioritize consumer protection and adhere to the regulations outlined in the Price Indication Ordinance.
