As part of its investigation, the Competition and Markets Authority (CMA) will examine whether Emma Sleep has misled consumers by using countdown timers and claims about time limits to imply that a discounted price will end soon, when this may not be the case.
Today’s announcement marks the start of a new programme of consumer enforcement work focused on so-called ‘Online Choice Architecture’ and aimed at tackling potentially harmful online selling practices, including pressure selling tactics such as urgent time limited claims.
The CMA’s consumer enforcement programme will look at online sales practices including;
- urgency tactics such as countdown clocks, where sellers put pressure on shoppers to buy quickly
- eye-catching discount offers, such as ‘50% off’ claims, when the real price reduction may not be as great as claimed
Earlier this year, the CMA reported on how the way businesses present information and choices to consumers online can be used to influence people’s purchasing decisions and identified 21 potentially harmful practices which are often used across the online economy.
The CMA also launched its Online Rip-Off Tip-Off campaign earlier this year, which revealed that 71% of people shopping online had encountered misleading selling tactics. The CMA offered tips to help shoppers spot and avoid practices that could result in them being ripped off. Alongside that campaign, the CMA will use its full range of powers to ensure that misleading selling practices are tackled from all angles.
Sarah Cardell, interim Chief Executive of the CMA, said:
Nearly all of us shop online and it’s easier than ever to buy something at the click of a button. With the rising cost of living, genuine deals are worth shouting about – but companies using misleading ‘sale’ prices or fake countdown clocks can put unfair pressure on people to buy and could break consumer law.
The CMA is today reminding businesses they should not use urgency claims to mislead consumers and, if they do, they face the risk of CMA action.
This investigation into Emma Sleep is just the start of our work into potentially misleading online claims and all sectors are under scrutiny. Companies should take note: look at your own practices and ensure they’re in line with the law.
For more information, visit the Emma Sleep inquiry page.
Notes to editors
- The CMA’s investigation concerns Emma Sleep GmbH and other firms in the same corporate group (‘the Emma Group’).
- The CMA will now engage with the Emma Group and gather further evidence to determine whether the CMA considers any of the companies in the group may have broken consumer protection law. The CMA is at the initial stage of its investigation. Accordingly, it should not be assumed that any business under investigation has broken consumer protection law.
- How the case will progress depends on the evidence – this could include the CMA closing the investigation if it believes that consumer protection law is unlikely to have been breached, securing undertakings from the company to address any concerns, or taking court action.
- As an enforcer under Part 8 of the Enterprise Act 2002, the CMA cannot currently levy administrative fines for breaches of consumer law, although the government committed to giving the CMA and other regulators this power in the Autumn Statement on 17 November 2022. At present, the CMA can enforce consumer law through the courts, and where appropriate, seek additional measures to improve consumer choice, drive compliance with the law, or secure redress for consumers.
- The Advertising Standards Authority (ASA) issued a ruling dated 16 March 2022 against Emma Matratzen GmbH, a subsidiary of Emma Sleep GmbH, in which the ASA upheld (Complaint Ref: G22-1141037 Emma Matratzen GmbH) complaints relating to the use of misleading reference pricing and a misleading flash sale countdown clock. The ASA found there had been a breach of The UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.
- Online Choice Architecture (OCA) is the design of the online environment where consumers interact with businesses. OCA affects consumer behaviour and can both benefit and harm consumers. The CMA’s discussion paper, ‘Online Choice Architecture: How digital design can harm competition and consumers’, sets out 21 OCA practices showing how consumer decision making can be affected by the structure of choices presented to them, the actual information provided, the way in which that information is provided, and the forms of pressure applied.
- Find out more on the CMA’s consumer campaign on misleading online practices.
- The main consumer protection legislation relevant to the CMA’s concerns about misleading time limited online discounts is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs aim to protect consumers from unfair commercial practices such as the misleading provision or omission of information as part of sales processes.
- For media enquiries, contact the CMA press office on 020 3738 6460 or email@example.com.