Market Court bans misleading statements about discounted prices

At the request of the Consumer Ombudsman, the Market Court has ordered sports brand SGN Sportia Oy to stop using misleading statements in its marketing. Sportia is forbidden from comparing its selling price to the recommended retail price in cases where this price does not correspond to the general market price. The company is also forbidden from comparing the selling price to its own earlier selling price or competitors’ prices if the company or competitor has never actually charged the price in question. In contrast, the Market Court did not take the view that TopSport, part of L-Fashion Group Oy, used misleading comparison prices in its marketing.

The Consumer Ombudsman took Sportia to the Market Court in autumn 2017 on the basis of the misleading information given in connection with its discounted prices. Between August 2016 and March 2017, Sportia had continually advertised on its webpages discounted prices shown using discount percentages, comparison prices or other discount-related expressions such as ‘20% off’ or ‘Save €40’. The discounts were not however genuine because neither Sportia nor its competitors had ever actually charged for the products the price from which the discount had been calculated.

The Market Court took the view that the misleading information given in Sportia’s marketing would have the tendency to lead consumers to make purchasing decisions which they would not have made without the information in question. The Market Court imposed a ban on the company and reinforced this ban with a conditional fine of €40,000.

“Fake discounts confuse consumers’ understanding of the normal price level and of how large the advertised discount really is. This kind of misleading of consumers is deplorable and should come to an end”, states Consumer Ombudsman Katri Väänänen.

From the consumers’ perspective, it is a good thing that price competition functions well and that products can occasionally be bought at a discount. Inaccurate comparison prices, discount percentages and claims about discounts and savings mislead consumers.

TopSport’s advertised price advantage was genuine

At the same time as giving the Sportia ruling, the Market Court also gave their ruling on TopSport’s marketing. In its advertising, TopSport continuously displayed a crossed out comparison price next to the selling price for its running shoes over a period of nine months. The advertisements did not, however, use discount-related expressions such as ‘X% discount’ or ‘Save €X’.

The Consumer Ombudsman sought a ruling from the Market Court as to how long a company may compare its own selling price to a product’s earlier selling price. Underlying this case was the question of whether the selling price charged earlier becomes at some point no longer fit for comparison because with the passing of time it no longer gives a true representation of the discount.

In contrast to the Consumer Ombudsman’s request, however, the Market Court took the view that TopSport’s references to the earlier selling price did not suggest in a misleading manner that the discounted price was especially cheap. TopSport had charged the original price for the product before the price was lowered later on. The Market Court also took the view that the 9-month duration of the marketing was not misleading because the case related to a period following the main sales season for a seasonal product.

Market Cap Court rulings