JYSK Oy, a company selling furniture and home decor items, has not ceased its misleading discount marketing despite the instructions provided by the Consumer Ombudsman. For this reason, the Consumer Ombudsman has issued an injunction against the company to prohibit it from continuing such marketing. A conditional fine of EUR 100,000 was issued in order to enforce the injunction.
Healthy price competition and discounts on products benefit consumers. However, misleading marketing hampers the consumers' understanding of the shop's normal price levels and the actual size of the advertised discount. Instead of advertising a special offer, the term normal price should be used if a product is constantly being offered at the price in question or if it has never been sold at the price which has been used as the basis for calculating the discount.
Continuous special offers become misleading, unfounded discounts
In its marketing, JYSK Oy has presented claims according to which a product on special offer is on sale at the specified price only for a limited time. In reality, the same product has been sold at the same or nearly the same discounted price continuously month after month. The product has been marketed repeatedly by advertising new, limited period discounts immediately after the previous fixed-term discount campaign has ended.
For example, the Consumer Ombudsman reviewed a six-month period from August 2017 to February 2018, during which time the Wellpur mattress topper was marketed with limited period offers for 21 consecutive times so that the validity of the new offer started immediately or almost immediately after the previous offer had ended.
JYSK Oy’s marketing included typical expressions referring to discounts, such as percentages, comparison prices and other expressions referring to discounted prices. Such expressions are likely to give consumers the impression that prices have been discounted.
In addition, the expressions used in JYSK’s advertising brochures, such as “Offers are valid 8–21 January 2018” and “the discount is calculated from the normal price” have created the impression that the product is offered at the specified price only for a very limited time. However, as this type of marketing had been recurrent for the same product, it no longer was a case of a temporary discount on the product but unfounded advertising of a discount.
“The marketing carried out by the furniture business has been monitored very closely by the Consumer Ombudsman since August 2016. Even though the Consumer Ombudsman has issued injunctions against certain companies, monitoring has revealed that unfounded expressions referring to discounts are still being used in the marketing of furniture. In order to ensure that markets are operating fairly both from the perspective of consumers and competition, we are determined to take to the Market Court any cases related to discount marketing that is misleading,” says Consumer Ombudsman Antti Neimala.
The primary objective of the Consumer Ombudsman is to make the company acting in breach of the law stop doing so, or to persuade it to change its actions voluntarily. If necessary, the Consumer Ombudsman takes any coercive measures required in the case, or refers the matter to be heard by a court of law. In practice, an injunction enforced with a penalty payment is issued in such situations.
The Consumer Ombudsman may impose injunctions directly in cases deemed to be of lesser significance in terms of the application of the law or otherwise. An injunction becomes void if the company announces that it objects within a given time limit. After this, a decision on the injunction is made by the Market Court, based on an application submitted by the Consumer Ombudsman.
The Market Court and the Consumer Ombudsman may both issue a notice of a conditional fine in order to lend force to the injunction. If, despite the ban, the company continues to act illegally, the Consumer Ombudsman may request the Market Court to order that the conditional fine be paid.
The Consumer Ombudsman issued an injunction against four furniture stores due to misleading advertising. Press release of the Finnish Competition and Consumer Authority, 13 October 2017.
Consumer Ombudsman: Deceptive pricing in the furniture business. Press release of the Finnish Competition and Consumer Authority, 7 March 2017.