In recent years, the Consumer Ombudsman has had to intervene repeatedly in cases of misleading methods used to market price reductions for consumer goods, particularly by sports equipment and furniture retailers. Four cases are being processed in the Market Court. The Consumer Ombudsman reminds all companies that it is against the Consumer Protection Act to use discount percentages or comparison prices when communicating product prices, if the product price used as the basis of the price reduction has not been previously charged to consumers in the same outlet. The same practice applies to online stores.
The Act states that a discount announced by a trader on a consumer good or service must be based on an actual price charged by the trader previously. If the product has not previously been sold at a higher price, discount claims made in marketing are invalid and misleading.
A widespread problem
The Consumer Ombudsman met with 10 key actors in the sports equipment sector in March 2016. On that occasion, discount marketing regulations, Market Court case law and guidelines by the Consumer Ombudsman were compiled for the sector. The idea was to ensure that all companies are equally aware of the requirements of the Consumer Protection Act and comply with the Act in their price markings and discount campaigns.
The Consumer Ombudsman monitored the web pages of the companies in question from August 2016 far into 2017. On the basis of the observed offences, in the summer of 2017 the Consumer Ombudsman issued an injunction against seven sports retailers due to misleading advertising. Some of the companies opposed the injunction, which became void in their cases. Additional injunctions were issued in the autumn of 2017, on this occasion to furniture businesses for similarly misleading marketing.
In late 2017, the Consumer Ombudsman took four companies opposing the injunction to the Market Court and demanded that they be subjected to injunctions for misleading comparison prices, enforced by conditional fines of EUR 100,000.
One new injunction in March 2018
According to the Consumer Ombudsman, the sports equipment retailer Scandinavian Outdoor Oy used misleading price comparisons during a period of at least 10 months in 2016-2017. In February 2018, the company notified the Consumer Ombudsman that it wished to avoid going to the Market Court and would accept the Consumer Ombudsman’s injunction that it had opposed in the summer of 2017.
The company was issued with a new injunction on 1 March 2018. The injunction states that Scandinavian Outdoor may not use discount percentages or comparison prices to communicate product prices in its marketing, if the product price used as the basis of the price reduction has not been previously charged to consumers in the same outlet. Notice of a EUR 100,000 conditional fine was issued in order to enforce the injunction.
The Consumer Ombudsman withdrew its Market Court application concerning Scandinavian Outdoor on 14 March 2018. If, despite the injunction, the company continues to act illegally, an order to pay a conditional fine of EUR 100,000 may be requested from the Market Court.
The matters of the injunctions issued against SGN Sportia Oy, L-Fashion Group Oy and XXL Sports & Outdoor Oy for misleading marketing will continue to be processed in the Market Court. The matter of the injunction issued against Kruunukaluste Oy for misleading marketing is still being heard at the Market Court.
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. A decision on the injunction is made by the Market Court, based on an application submitted by the Consumer Ombudsman. The Consumer Ombudsman may also impose injunctions directly in cases deemed to be of lesser significance in terms of the application of the law or otherwise.
More information:
- Injunctions issued by the Consumer Ombudsman (in Finnish).
- Consumer cases in the Market Court and Supreme Court (in Finnish).