CMA calls on businesses to review practices as it investigates second firm over use of ‘urgency’ claims
The Competition and Markets Authority (CMA) will examine whether Wowcher has misled consumers by using countdown timers and other urgency claims, which may place unfair pressure on consumers to complete their purchases quickly.
This announcement marks the next stage in the CMA’s programme of enforcement work focussing on so-called ‘Online Choice Architecture’ (OCA), which aims to tackle potentially harmful online selling practices. It follows the launch of the CMA’s investigation into Emma Sleep in late 2022. The CMA’s investigation of Wowcher will also examine other online selling practices used by Wowcher, including how it enrols consumers in its membership scheme.
This investigation follows the publication of an open letter on 29 March from the CMA to UK businesses detailing ‘online red lines’ on misleading urgency and price reduction claims. It provides practical illustrations of where common online tactics may be misleading consumers or applying unfair pressure. The advice is for all businesses that sell or promote goods online to UK shoppers, so they can stop sales practices that could break the law.
Sarah Cardell, Chief Executive of the CMA, said:
People who buy online should not be pressurised by practices implying that they must act quickly to avoid missing out, when this is not the case. We’ll be scrutinising these claims from Wowcher and if we find the company is using misleading online selling tactics, we won’t hesitate to take enforcement action – through the courts if necessary.
This is the second investigation we have opened into urgency claims – which can be a type of pressure selling – and all companies should take note and review their own practices. We’ve published advice to help with this, which sets out clearly those online urgency and price reduction claims that are likely to mislead or put unfair pressure on consumers.
For more information, visit the Wowcher inquiry page.
Notes to Editors
The CMA’s investigation concerns Wowcher Limited, LivingSocial Limited and other firms in the same corporate group (‘Wowcher’).
The CMA will now engage with Wowcher and gather further evidence to consider whether Wowcher may have broken consumer protection law. The CMA is at the initial stage of its investigation. Accordingly, it should not be assumed that any business under investigation has broken consumer protection law.
How the case will progress depends on the evidence – this could include the CMA closing the investigation if it believes that consumer protection law is unlikely to have been breached, securing undertakings from the company to address any concerns, or taking court action.
As an enforcer under Part 8 of the Enterprise Act 2002, the CMA cannot currently levy administrative fines for breaches of consumer law, although the government committed to giving the CMA and other regulators this power in the Autumn Statement on 17 November 2022. At present, the CMA can enforce consumer law through the courts, and where appropriate, seek additional measures to improve consumer choice, drive compliance with the law, or secure redress for consumers.
The main consumer protection legislation relevant to the CMA’s concerns about misleading urgency claims and other harmful online selling practices is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs aim to protect consumers from unfair commercial practices such as the misleading provision or omission of information as part of sales processes.
Online Choice Architecture (OCA) is the design of the online environment where consumers interact with businesses. OCA affects consumer behaviour and can both benefit and harm consumers. The CMA’s April 2022 discussion paper, ‘Online Choice Architecture: How digital design can harm competition and consumers’, sets out 21 OCA practices showing how consumer decision making can be affected by the structure of choices presented to them, the actual information provided, the way in which that information is provided, and the forms of pressure applied.
As part of the CMA’s work focussing on OCA, the CMA is also investigating Emma Sleep over concerns that some of its online sales practices may breach consumer law. For more information, visit the Emma Sleep inquiry page.
The CMA has also published an open letter and compliance advice to UK businesses that sell online. The letter provides examples of claims that the CMA considers breach consumer law, specifically misleading urgency and price reduction claims.
The CMA’s consumer campaign on misleading online practices, “the Online Rip-Off Tip-Off” offers tips to help shoppers spot and avoid these practices, and enables consumers to report these tactics directly to the CMA.
For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.