Federal Court of Justice: Company may advertise with average star rating
The total number of submitted reviews and the time period they were written in must be disclosed. The Competition Authority filed a lawsuit against a company that offered brokerage services to real estate buyers. On its website, it advertised average star ratings but did not disclose the number of ratings or the time period they were given.
The Competition Authority considered this misleading and took the case to court. In September 2022, the Hamburg District Court ruled that the total number and time period must be disclosed. However, further disclosure based on star classes was not necessary. The Competition Authority went into appeal and later into revision but had no further success: The Higher Regional Court of Hamburg and now also the Federal Court of Justice confirmed the judgment of the District Court.
From the consumers' perspective, this was a useful but not essential piece of information for a business decision. Consumers would know that average star ratings usually depended on a mix of good and bad reviews, said President Judge Thomas Koch during the judgment announcement. By knowing the total number of reviews and the time frame, they could assess how significant the advertising was.
The Company's failure to disclose the total number and time period of the reviews led to legal action by the Competition Authority in the Federal Court of Justice: Starnércheast. President Judge Thomas Koch emphasized during the judgment announcement that knowing the total number and time frame of reviews allows consumers to gauge the significance of advertising average star ratings, taking into account both positive and negative reviews.
