In a flurry of recent activity, The Competition and Markets Authority (CMA) has shown it means business when it comes to cracking down on the use of urgency and price reductions to pressure consumers into buying online.
In an open letter published at the end of March, the CMA addresses businesses selling online, asking them to review their how they present information and choices to consumers. As the competition regulator, the CMA is responsible for protecting consumers and preventing and reducing anti-competitive activities. This announcement marks the next stage in the CMA’s programme of enforcement work focussed on tackling potentially harmful online selling practices.
A few days later, the CMA issued a press release announcing that it is examining whether discount giant Wowcher has misled consumers by using countdown timers and other urgency claims. This comes as part of a wider investigation which is trying to assess whether the company has been putting unfair pressure on consumers to complete their purchases. As part of its investigation, the CMA will consider whether Wowcher may have breached consumer protection law, including under the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (the 'CPR') which covers online selling practices.
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.
The CMA does have enforcement powers and, as set out in its Annual Plan for 2023/24, is actively monitoring this area. The CMA’s powers are currently under review and a proposal (the draft Digital Markets, Competition and Consumer Bill) to give the CMA the ability to impose fines of up to 10% of turnover was published on 25th April. If this legislation comes into force, those retailers using pressure tactics could become liable for hefty fines.
Our senior commercial solicitor, Liz Appleyard, also commented:
Companies selling online may explore a wide range of tactics to help hit revenue targets but it’s important they take note of the CMA’s advice and review their practices. The new legislation is looming and until that comes into force the CPR will be the key legislation so it’s great to see the CMA provide clear and easily digestible examples for e-commerce and marketing managers to follow. That said, it’s always worth checking with a commercial solicitor if a business is unsure whether their activities comply with regulation.