The rules on fake discounts apply since 1 January 2023 and serve to prevent consumers from being misled about price advantages. The basic principle is that discounts may be given only on the lowest price at which the product was offered in the 30 days preceding that discount. This should counteract, among other things, the practice of first raising the price and then showing an artificially high discount. This problem often occurs with ‘from/for’ prices, but the rules also apply to other discounts, such as percentages.
According to the Netherlands Authority for Consumers & Markets (ACM), five online shops violated these rules. One company, for instance, presented a product as being priced ‘from’ €699 ‘for’ €629, while that product cost €539 four days earlier. Another company misled consumers by artificially increasing the ‘from’ price of a product. The product was first offered ‘from’ €149.99 ‘for’ €99.99, but the next day ‘from’ €199.99 ‘for’ €99.99. In another case, the ‘from’ price remained the same (at €199), but a higher ‘for’ price was presented (€104 instead of €99). Consumers were therefore not given a discount, but in fact had to pay €5 more.
Enforcement by ACM was reasonably to be expected, since it had previously announced that it would monitor online shops to check for compliance with the new rules. It is apparent from the fine decisions that the regulator had indeed been recording the prices of several products for months.
The fined companies operate in a wide range of sectors: from clothing (G-Star and Tommy Hilfiger) to home furnishing (JYSK and Leen Bakker) and the Koopjedeal.nl website. Fines ranging from €105,000 to over €160,000 were imposed on them. In determining the level of the fines, ACM took into account whether the incorrect ‘from’ prices during the investigation period were actually used as sale prices and were not artificially inflated. The duration of the infringement and the difference between the incorrect ‘from price’ and the correct ‘from price’ were also taken into account.
The fines are at the low end of the applicable fine range, which runs to €600,000. ACM took into account as a fine-reducing circumstance that this is the first time it has imposed fines and that the standard had been in place for only a relatively short period at the time of the investigation. Three offenders furthermore received a 10% reduction of the fine for cooperating in simplified settlement, acknowledging the violation and promising improvement.
ACM’s report shows that other companies also breached the rules, but only the five companies with the largest number of breaches were fined. The other companies investigated were given warnings. ACM announced that it would continue to investigate clear prices and fair discounts. Online shops should therefore take heed.
This blog has also been published in the Snelrecht section of trade journal Mr. The article can be read here.
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