Section 31 UWG – Misappropriation of awards and privileges

Section 31 UWG – Misappropriation of awards and privileges

The misappropriation of awards and privileges under Section 31 UWG describes the prohibition on, in a business context, advertising with titles, qualifications or awards that do not in fact exist, or using them in a way that creates a false impression. Companies may therefore neither adorn themselves with special honours without entitlement nor pretend to have official powers or mislead as to their scope. The purpose of this provision is to ensure fair competitive conditions by allowing only those persons or companies to benefit from awards who have in fact lawfully received them. At the same time, the rule prevents existing awards from being presented ambiguously or exaggeratedly, so that customers do not develop false expectations.

The misappropriation of awards (Section 31 UWG) means that a company may not use titles, powers or honours to which it is not entitled, or present them in a misleading manner.

Peter Harlander
Harlander & Partner Rechtsanwälte „Companies may only advertise qualifications that actually exist—any deviation jeopardises trust and a level playing field in competition.“

Significance of Section 31 UWG in competition law

Section 31 UWG plays a key role in competition law because it prevents companies from gaining advantages through unauthorised awards or feigned powers. The provision makes it clear that only those companies may present themselves with certain titles, honours or official authorisations that actually possess them.

The significance of the provision lies above all in the fact that it protects trust in commercial dealings. Customers often rely on external indicators such as certificates, professional titles or awards. If this information is false or misleading, it creates a distorted picture of a company’s quality or competence.

At the same time, Section 31 UWG safeguards fair competition. Companies should prevail not through deception, but through genuine performance. This keeps competition transparent and comparable.

The provision applies in several typical situations:

• Unauthorised use of awards or titles
• Pretending to have official approvals or powers
• Misleading presentation of honours that do in fact exist

Overall, this provision ensures that statements about qualification and recognition remain clear, true and verifiable. This strengthens both customer trust and equal opportunities in competition.

Awards and powers covered

It covers all statements by which a company presents special qualifications, recognition or official powers to the outside world. What matters is not the form, but the effect on the customer. As soon as a statement creates the impression that a company is particularly distinguished or officially authorised, it falls within the scope of the provision.

The law does not strictly distinguish by origin. Both state and private awards may be relevant. The only decisive factor is whether they actually exist and are used correctly.

Typical areas covered include:

• Titles, certificates and awards of any kind
• Official approvals, licences and powers

This ensures that every form of visible qualification corresponds to reality.

Unauthorised use of titles and honours

A common infringement is that companies use titles or awards to which they are not entitled. Mere use is sufficient to create a false impression. It does not matter whether someone intended to deceive.

Awards in particular have a strong impact. Customers associate them with quality, experience and special achievements. If that basis is missing, it creates a clear competitive disadvantage for honest providers.

Typical cases are:

• Invented prizes or quality seals
• Claiming awards that were never granted

The law draws a clear line here: Only honours that have actually been awarded may be used.

Pretending to have official powers

Even more serious is pretending to have state-granted powers or authorisations. Such statements have a particularly strong effect because they are associated with official oversight and verified quality.

If a company claims to have an official approval, customers automatically expect a higher level of security and professionalism. That is precisely why this form of deception is particularly problematic.

A violation exists in particular if:

• an official approval does not exist
• an authorisation is merely pretended

A strict standard applies here. Statements about state powers must be completely accurate and unambiguous, as they have a particularly strong influence on customer trust.

Misleading presentation of existing awards

Even if an award actually exists, it may not be used arbitrarily. Section 31 UWG applies as soon as the presentation conveys a false impression of the significance, scope or occasion of the award.

In practice, the problem is often not the award itself, but the way it is presented. Companies tend to highlight successes. This can quickly create the impression that the achievement is more extensive or more significant than it really is.

Misleading conduct exists in particular if:

• an award is presented in an exaggerated manner
• important limitations or background information are missing

Ultimately, what matters for customers is the effect. If that effect no longer corresponds to reality, the line into unlawfulness has been crossed.

Sebastian Riedlmair
Harlander & Partner Attorneys „Awards must be presented objectively, correctly and in full.“

Typical infringements in practice

Section 31 UWG is most significant in companies’ day-to-day operations. Especially in advertising and public presentation, situations quickly arise in which statements go too far or no longer correspond to reality. Many infringements do not happen intentionally, but due to imprecise wording or exaggerated presentation.

In practice, certain patterns recur particularly frequently. These mainly concern professional titles, corporate presentation and quality seals, because they have a strong influence on purchasing decisions.

Typical problem areas are:

• exaggerated or unclear advertising claims
• use of terms with special meaning without a basis

Unlawful professional titles

Professional titles are particularly trust-building for customers. They convey the impression of training, experience and state oversight. That is precisely why many of these titles are legally protected.

An infringement occurs if a company uses such a title without meeting the necessary requirements. Mere use may be sufficient to create a false impression.

Typical cases are:

• Use of protected titles without the corresponding qualification
• Presenting oneself as a specialised professional business without authorisation

A clear rule applies here: What sounds like special qualification must actually exist.

Misleading corporate presentation

Not only individual terms, but also a company’s overall presentation can be misleading. A presentation becomes problematic if it creates the impression that a company is larger, more official or more qualified than it actually is.

This often happens through deliberately chosen designations or through a design that suggests closeness to authorities or special institutions.

Typical constellations include:

• Company names with misleading implications
• Presentations that pretend state oversight or recognition

For the legal assessment, it always depends on the effect. What matters is the impression an average customer gains. As soon as that impression no longer corresponds to reality, an infringement is likely.

Misleading use of quality marks

Quality marks and seals have a particularly strong effect in commercial dealings. At first glance, they signal verified quality, reliability and trust to customers. That is precisely why they are subject to strict legal requirements.

A problem always arises when a company uses such a mark without meeting the necessary requirements. In such cases, customers assume that an independent body has reviewed the service, although that is not true.

Typical violations include:

• Use of a seal without valid certification
• Use of a mark for services that were not reviewed at all

Even minor inaccuracies can be decisive. The manner of presentation alone can lead to a seal having greater significance than is actually justified.

A clear standard therefore applies to companies: Quality marks may only be used if they are correct, up to date and fully accurate.

Distinction from other provisions in the UWG

Section 31 UWG does not stand alone, but is part of a comprehensive system for protection against unfair competition. In many cases, the provision overlaps with other rules, in particular with the general prohibition of misleading practices.

The special feature of Section 31 UWG is that it specifically protects awards, titles and powers. While other provisions generally cover any deception, this provision focuses on visible indicators of quality and recognition.

In practice, this means that conduct may breach several provisions at the same time. The decisive factor is then which provision fits more specifically or is stricter.

Relationship to Section 2 UWG

Section 2 UWG generally prohibits misleading business practices. This also includes false statements about qualifications, powers or awards. The two provisions therefore overlap in substance.

The difference lies in the focus:

• Section 31 UWG specifically regulates awards and official powers
• Section 2 UWG covers any form of misleading statement

In many cases, both provisions apply at the same time. Section 31 UWG often operates as a specific supplement when the issue specifically concerns titles or awards.

Significance of the blacklist in the annex

In addition, the UWG contains a so-called “blacklist”. It lists business practices that are unlawful under all circumstances. This also includes the use of certain quality marks without authorisation.

This rule is particularly strict because it no longer requires a case-by-case assessment. As soon as conduct falls under it, it is automatically deemed unlawful.

Typical cases from practice are:

• Use of quality or certification seals without permission
• Misleading references to special recognitions

The blacklist ensures that particularly clear deceptions are prohibited immediately.

Legal consequences of infringements

A breach of Section 31 UWG does not remain without consequences. The law provides clear consequences to ensure that companies do not gain advantages from unlawful statements. Both administrative and civil-law measures play a role.

Even negligent conduct may be sufficient. Companies must therefore actively ensure that their statements are fully accurate and legally permissible. Errors in public presentation can quickly lead to legal problems.

Typical consequences include:

• administrative penalties and sanctions
• claims by competitors for injunctive relief

Administrative fines and sanctions

Anyone who breaches Section 31 UWG commits an administrative offence. In such cases, the competent authority may impose fines. These can be substantial and often catch companies by surprise.

The sanction does not require intentional conduct. Simple negligence may suffice. This increases the risk, as many infringements in everyday business arise from unclear or imprecise advertising.

For companies, this means:

• even minor errors may be sanctioned
• regular review of public presentation becomes necessary

Civil-law claims and injunctive relief

In addition to the authorities, competitors may also take action against unlawful practices. They have the right to seek injunctive relief and removal. In many cases, claims for damages may also be considered.

This means that an infringement often has double consequences. On the one hand, a penalty is threatened; on the other, competitors can actively take action against the conduct.

Typical consequences are:

• cease-and-desist letters from competitors
• court injunction claims

This combination makes it clear how important a legally compliant public presentation is in competition.

Risks in marketing and public presentation

The greatest risks arise particularly in marketing. Companies want to present themselves as positively as possible and therefore often resort to strong statements about quality, experience or special status. This is exactly where the danger lies.

Even minor inaccuracies can lead to a statement being assessed as misleading. What matters is not how the company intended the statement, but how customers understand it.

Typical risks are:

• exaggerated advertising claims without a clear basis
• use of terms with special meaning without entitlement

It is particularly critical that many of these mistakes arise unconsciously in everyday business. Companies should therefore review their public presentation regularly and design it deliberately.

Your Benefits with Legal Assistance

Mistakes can occur quickly, especially when using titles, awards or professional designations, and these can have legal consequences. A lawyer ensures that you present yourself on the safe side legally and protects you from unnecessary risks.

A clear advantage is that you can shape your public image in a targeted and legally compliant manner. This not only helps you avoid penalties, but also strengthens your customers’ trust.

Specific advantages:

• Review of your designations and advertising for legal permissibility
• Avoidance of administrative fines and cease-and-desist letters through early advice
• Strategic design of your public presentation without breaching competition law

Peter Harlander
Harlander & Partner Rechtsanwälte „With professional support, you use your qualifications correctly while avoiding allegations of misleading conduct.“

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