The retailer says it has removed the scene from the spot to be shown early in the evening after receiving 50 written complaints.
The advertisement depicts a nerdy fictional family called the Löli, who live a home with outdated electronic equipment and then discover that a new Media Markt store has opened just across the street.
The father looks at an old-fashioned television with a screen that is too small and the mother and daughter are seen with old-fashioned phones (hint: they need cellphones).
Meanwhile, the teenage son is briefly shown masturbating under the covers of his bed while watching a primitive computer image of a copulating couple on an old TV .
One viewer complained to the 20 Minuten newspaper that the ad was aired at around 7pm when children could see it.
“We know that the deliberately exaggerated and sometimes oblique humour of our advertising does not always find favour,” a spokeswoman for Media Markt told the newspaper.
“We want to polarize with our advertising but not to offend or shock.”
The company said it had pulled the spot from its website but as of Thursday morning the unexpurgated version was still available on YouTube.
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