The Competition and Markets Authority (“CMA”) has issued formal correspondence to Emma Sleep, an innovative mattress company, detailing its concerns around the use of certain selling techniques and proposing steps to be taken to avoid the risk of breaching of consumer protection law.
This latest move by the CMA follows an investigation it first launched into the online mattress company in November 2022 (which we wrote about here) as a result of concerns it had around particular online selling techniques used – for example whether ‘urgency claims’, the use of countdown timers and heavy ‘discounts’ had the effect of misleading consumers and putting unfair pressure on them to make quick purchases.
The investigation is part of the CMA's newly-introduced Online Choice Architecture (OCA) programme which aims to regulate manipulative online selling practices (dark patterns) including, but not limited to pressure selling, subscription traps and hidden charges.
What are the findings?
The results of the investigation revealed that the sales techniques in question were not used accurately as:
- only some of the Emma Sleep products being advertised were actually sold at full price and so any "discounts" were not genuine savings as against the usual selling price
- many of the sales portrayed as ending soon were replaced by new ones once the countdown timer had ended (sometimes within 24 hours) meaning that some items never returned to their original price and discounts were not time-limited.
CMA interim chief executive Sarah Cardell said: “With the rising cost of living, genuine deals are worth shouting about – but companies using misleading ‘sale’ prices or fake countdown clocks can put unfair pressure on people to buy and could break consumer law. The CMA is today reminding businesses they should not use urgency claims to mislead consumers and, if they do, they face the risk of CMA action.”
Next steps and key takeaways
Emma Sleep now has the opportunity to respond to the CMA’s concerns and avoid court action by signing undertakings to change its online sales tactics.
Note that the CMA cannot currently impose fines and can only enforce breaches of consumer protection law through the courts. However, this may be set to change with the Digital Markets, Competition and Consumers Bill (expected to be brought into force next year). If current proposals are implemented, this means that the CMA is expected to have significantly stronger enforcement powers including the ability to impose fines of up to 10% of turnover. In light of this, businesses should consider reviewing any potentially harmful practices to ensure compliance with consumer law.
You can read the full press release on the CMA website here.
If you would like to discuss issues around consumer protection law please get in touch with Richard Hugo.