It’s the final countdown…or is it?: CMA issues decision on online pressure-selling tactics

By: Arthur Artinian, Gabriela da Costa, Georgina Rigg, and Maya Ffrench-Adam

Countdown clocks are a useful feature of digital advertising. Think “Sale ends midnight!” accompanied by a clock counting down the minutes you have left to make an order. When used correctly these urgency claims can help drive interest in a sale. However, they can also easily become misleading and breach UK consumer protection laws.

These types of “urgency claims” include scarcity, popularity, act fast, or time limited claims and have recently come under the spotlight of the UK Competition and Markets Authority (“CMA”).

A cautionary tale for online pressure-selling tactics

The CMA’s interest in mattress-in-a-box retailer Emma Sleep follows an ASA decision in March 2022 which found that the countdown clocks used by the company pressurised consumers into making quick transactional decisions, due to the misleading implication that the offer would end when the timer ran down.

Following its investigation, on 7 July 2023 the CMA publicly called upon Emma Sleep to change its selling practices, which were putting unfair pressure on consumers to make quick purchases. This investigation formed part of the CMA’s new enforcement focus around Online Choice Architecture and harmful online selling practices, known as “dark patterns”.

Firstly, the CMA echoed the ASA and found that the countdown clocks were misleading because sales were quickly replaced with another after the previous one had concluded (in some cases as soon as 24 hours after).

Secondly, the CMA considered Emma Sleep’s use of discount offers (displayed via ‘was/now’ pricing). The regulator found that because only a small fraction of products were sold at the full ‘was’ price point, the discounts didn’t represent a genuine saving against the usual price of Emma Sleep’s products. Consequently, the discount offers displayed were found to be misleading.

The CMA’s warning to online businesses

In March 2023, the CMA published an open letter to all online businesses around the use of (i) urgency and (ii) price reduction claims. The open letter is addressed to all businesses involved in selling or promoting the sale of goods, services, or digital content to online consumers in the UK.

The open letter sets out sixteen examples of ‘do not’ conduct that may be considered misleading or unfair under UK consumer law.

How to avoid misleading urgency promotions

• Countdown clocks: Ensure that when the countdown clock ends, the offer actually ends and a new comparable offer does not begin shortly thereafter.

• Checkout timers: Ensure that checkout timers do not restart on expiry, or on refreshing the page. Checkout timers that are not actually time limited will likely be regarded as misleading.
• Stock level claims: Only make claims about low stock levels where there is an actual stock shortage. This is not the case when new stock will arrive shortly, or where the contracts could still be performed (i.e. because the distribution system could promptly replenish low stock).
• Scarcity claims: Do not make claims such as “Act Fast! 10 people have this product in their bag” or “Selling out soon!” where your stock levels are high, or contracts could be performed immediately. Whilst these claims may be factually correct, they encourage act-fast behaviour for no reason.
• Product view claims: If you make claims about product views, for example “20 people are viewing this product now!”, ensure the claim is accurate and supported by underlying website algorithms.
• Sales time period claims: If you are making time period claims on product sales – e.g. “100 sold in 24 hours” this should refer to sales in the last 24 hours and not any 24-hour period. Again, whilst this may be factually true, it is likely to still be regarded as misleading.
• Product sales claim: If making a claim such as “200 people have purchased in the past hour”, ensure this claim relates to the specific product that the consumer is viewing, not different models by the same brand.

How to avoid misleading price reduction claims

• Comparison prices: When displaying comparative pricing claims, ensure that ‘was’ pricing reflects the genuine, and usual price the product is sold at. A significant proportion of overall items should still sold at this price. The CMA has suggested that if the ‘was’ price only represents 2-3% of overall sales, this is not the usual price.
• Outdated prices: Do not advertise a price reduction where the ‘was’ price used is clearly outdated (for example, the CMA give the example of a price used a year ago).
• Price promotion claims: Ensure that any price promotional claims (such as “50% off everything”) do not omit or hide information consumers need to know, and that the conditions of the offer are displayed prominently.

NB: Please note that the EU has different rules on reference pricing under the Omnibus Directive.

See our prior alert regarding the EU’s ‘30 day’ rule here.

Comment

The CMA’s open letter offers helpful guidance and examples on the kinds of online claims that could mislead consumers. Importantly, the guidance is also keen to confirm that marketing claims which are true on a literal reading can still be considered misleading.

The guidance also warns against cumulative urgency and price reduction claims. Where misleading or unfair urgency claims and price reduction claims are used in combination, or are repeated throughout the consumer journey, the likelihood of harm to consumers is even greater.

The CMA is currently also investigating urgency claims made by Wowcher, as the second firm targeted by its new Online Choice Architecture programme, with a decision expected in the coming months.

Businesses should now take the time to review their online promotions to ensure they are compliant.