The Market Court prohibits XXL’s misleading advertising

With its decision of 27 June 2018, the Market Court has prohibited the sports equipment retailer XXL Sports & Outdoor Oy (XXL) from misleading consumers with its advertising by making unsubstantiated claims according to which the prices of its products are the most affordable.

In 2014, the Consumer Ombudsman viewed the claims made by the sports equipment retailer, XXL, on the low prices of its products, combined with its promise related to price differences, as misleading for consumers. For example, only around half of the products subject to the price promise were being sold by other companies. With its marketing, XXL created an impression of lower prices which did not necessarily exist. The Consumer Ombudsman took XXL to the Market Court because the company refused to change its marketing in accordance with the demands made by the Consumer Ombudsman.

On 24 November 2015, the Market Court rejected the claim presented by the Consumer Ombudsman, ruling that the wording of the price promise made by XXL in its marketing had not been misleading for consumers. The Consumer Ombudsman appealed against the decision to the Supreme Administrative Court in 2016. According to the decision of the Supreme Court of 7 December 2017, the Market Court had not taken full account of the matters presented when evaluating the misleading nature of the defendant’s actions. According to the Supreme Court, XXL’s marketing had created an image of the company as the cheapest player on the market. The Supreme Court concluded that businesses, if so required, have an obligation to prove that their claims are correct. The Supreme Court annulled the decision of the Market Court and referred it back to the Market Court for further consideration.

After the Supreme Court’s decision, the case being processed in the Market Court only concerned the accuracy of the impression that XXL created in the minds of consumers of XXL being the company with the cheapest prices. This time, the Market Court stated in its decision that XXL had not proven in all respects that the claim it presented in its advertising was true. Therefore, XXL had presented in its advertising misleading claims that violated the Consumer Protection Act.

The latest injunction, which is the third one for XXL, is linked to a case in relation to which the Market Court, with its decision of 24 November 2015, had already prohibited XXL from giving a misleading impression of the affordability of its prices and the validity period of its offers. According to the Market Court, XXL had been emphasising the affordability of its prices by marketing its products at major discount rates. The discount rates had, however, been calculated from the recommended retail prices, which had not been generally applied to the product in question by XXL or other retailers. In addition, XXL had advertised that the products were being sold at the discounted price for a limited period only. However, the products had been sold at the same discounted price soon after the offer had expired. This was not a case of a product’s price being discounted for a limited period, but it was unfounded advertising of a discount.

Further information:

Supreme Court refers the case concerning a price promise made by XXL to the Market Court FCCA press release, 12 December 2017

The Consumer Ombudsman was given leave to appeal the XXL decision of the Market Court.  FCCA press release, 8 December 2016

The Market Court prohibits XXL’s misleading advertising. FCCA press release, 24 November 2015

Consumer Ombudsman took XXL to Finnish Market Court for misleading marketing FCCA press release, 3 March 2015