CASE OF KRONE VERLAG GmbH & Co. KG (No. 3) v. AUSTRIA
Violation of Art. 10;Pecuniary damage - financial award;Costs and expenses (domestic proceedings) - claim dismissed;Costs and expenses partial award - Convention proceedings
Christos Rozakis
9. Krone Verlag GmbH & Co. KG, a limited liability company with its registered office in Vienna, is the owner of the daily newspaper Neue Kronenzeitung published by Mediaprint Zeitungs- und Zeitschriftenverlag GmbH & Co. KG (“the publisher”). 10. On 9 and 11 December 1994 the Salzburg edition of the Neue Kronenzeitung published an advertisement for subscriptions to the newspaper in which it compared its monthly subscription rates with those of another regional newspaper, the Salzburger Nachrichten. According to the advertisement, the Neue Kronenzeitung was “the best” local newspaper. 11. On 13 December 1994 the Salzburger Nachrichten applied to the Salzburg Regional Court (Landesgericht) for a preliminary injunction (einstweilige Verfügung) under sections 1 and 2 of the Unfair Competition Act (Gesetz gegen den unlauteren Wettbewerb) against the applicant company and the publisher. It requested that the applicant company and the publisher be ordered to refrain from publishing the advertisement. 12. On 29 December 1994 the Salzburg Regional Court issued a preliminary injunction against the applicant company and the publisher to preserve the status quo during the proceedings. On appeal by the applicant company and the publisher, the Linz Court of Appeal (Oberlandesgericht) quashed the Regional Court's decision. The court stated, inter alia, that the two newspapers were competitors in the same market and for the same readership. On 23 May 1995 the Supreme Court (Oberster Gerichtshof), on appeal by the Salzburger Nachrichten, issued a preliminary injunction. The court found that the advertisement was misleading. It considered that the Salzburger Nachrichten was a “quality newspaper” and the Neue Kronenzeitung was not, and that this difference was not necessarily known to readersNeue Kronenzeitung “the best” local newspaper amounted to disparagement of the Salzburger Nachrichten. 13. In the main proceedings which followed, the Salzburg Regional Court ordered the applicant company and the publisher to refrain from publishing the advertisement as long as it did not provide at the same time information which made it possible to avoid any generally pejorative value statement or any other risk of misleading readers. Secondly, it ordered them not to refer to the sales price of the Salzburger Nachrichten as “expensive”. Thirdly, it ordered them to refrain from comparing the sales prices of the two newspapers unless they indicated at the same time the differences in their respective reporting styles, in particular as regards coverage of foreign or domestic politics, economy, culture, science, health, environmental issues and law, and referred also to the Neue Kronenzeitung as an entertainment-orientated communications medium and the Salzburger Nachrichten as a medium mainly geared to information. Lastly, it ordered them to publish the decision. 14. On 21 March 1997 the Linz Court of Appeal, allowing in part an appeal by the applicant company and the publisher, confined the third branch of the injunction to the order that the applicant company and the publisher refrain from comparing the sales prices of the two newspapers without indicating the differences in their reporting styles as regards coverage of foreign or domestic politics, economy, culture, science, health, environmental issues and law. It confirmed the lower court's decision as to the remaining branches of the injunction. The court considered that it was a matter of common knowledge that both newspapers were competing in the same market. As to the differences in quality between the newspapers and the argument that readers were not familiar with these differences, the Linz Court of Appeal referred to the Supreme Court's decision of 23 May 1995. 15. On 28 April 1997 the applicant company and the publisher lodged an appeal on points of law against this decision, relying on Article 10 of the Convention. 16. On 13 May 1997 the Supreme Court declared their appeal on points of law inadmissible. The decision was served on the parties on 16 June 1997. 17. The relevant sections of the Unfair Competition Act read as follows: Section 1 “Any person who in the course of business commits, for purposes of competition, acts contrary to honest practices, may be ordered to desist from further engaging in those acts and held liable for damages. Section 2 Any person who in the course of business, for purposes of competition, makes declarations that could be misleading about commercial conditions, especially on the quality, origin, method of production or calculation of the prices of single goods or services or the whole stock, on price-lists, about the manner and sources of supply, about the possession of awards, about the occasion or purpose of the sale or about the quantity of the stock, may be ordered to desist from further making those declarations and, if he knew or must have known that they were likely to mislead, held liable for damages. However, comparing prices in advertisements is authorised, if it is not contrary to this section or section 1.”