The Competition and Markets Authority has announced a new programme of consumer enforcement work focused on so-called “Online Choice Architecture”. It is aimed at tackling potentially harmful online selling practices, including pressure selling tactics such as urgent time limited claims.
Online choice architecture (OCA) is the environment in which people act, including the presentation and placement of choices and the design of interfaces. An example of an OCA practice is how the ranking of options, for example search results, affects consumer choices which may also have an impact on competition between businesses. OCA affects consumer behaviour and can both benefit and harm consumers. Earlier this year, the CMA issued two discussion documents setting out 21 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.
The CMA’s wider 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.
As part of its investigation, the CMA intends to examine whether the company 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. It says that it will now gather further evidence to decide if 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 emphasises that it should not be assumed that any business under investigation has broken consumer protection law.
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. The Regulations aim to protect consumers from unfair commercial practices such as the misleading provision or omission of information as part of sales processes.
The ASA issued a ruling dated 16 March 2022 in which it upheld complaints against Emma 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.
