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The CMA’s increasing scrutiny of online businesses’ use of urgency claims

On 31 March 2023, the CMA issued a press release announcing that it had launched an investigation into Wowcher's use of countdown timers and other urgency claims, on the basis that these selling practices put unfair pressure on consumers to complete their purchases quickly. In its press release, the CMA repeats its call for online businesses to review their online selling practices to ensure they do not amount to unfair or misleading pressure selling.

The investigation into Wowcher

The CMA interprets “urgency claim” to include any false or misleading time limited claim that is presented to consumers online, which may include untrue checkout timers or promotions which do not end when the claim states it will (including where the offer does end at the time stated but a new promotion replaces it which offers substantially the same deal).

As part of its investigation, the CMA will consider whether Wowcher may have breached consumer protection law, including under the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) (the “CPR”) which covers online selling practices. In particular, the CMA will consider whether Wowcher’s actions amounted to:

  • promoting misleading actions, by placing adverts which contain information that is untrue or deceptive (regulation 5, CPR);
  • making misleading omissions of important consumer information, by failing to state clearly important information the consumer needs at the time of purchase, to decide whether they wish to proceed with the sale (regulation 6, CPR); and/or
  • conducting aggressive practices, by putting unfair pressure on consumers to complete transactions (regulation 7, CPR).

The CMA’s increasing scrutiny on urgency claims 

This announcement follows the CMA’s recent publication on 28 March 2023 of an open letter, on the use of urgency claims by online businesses. The aim of the letter was to help online businesses understand and comply with their existing obligations under the CPR when making urgency claims. The letter includes examples where common claims made by online businesses to consumers during the sale process may constitute a breach.

This announcement also marks the next stage in the CMA’s programme of enforcement work focussing on so-called ‘Online Choice Architecture’ (OCA), which aims to tackle potentially harmful online selling practices, such as urgency claims. As part of the CMA’s consideration of OCA practices, the CMA launched an investigation into the use of online urgency claims by mattress and bed seller Emma Sleep in late 2022, which remains ongoing.

Takeaway

Online businesses understandably want to explore different selling strategies, to optimise consumer engagement and spending. However, with the CMA paying increasing attention to these strategies and their influence on consumer behaviour, online businesses should be prepared to face increasing scrutiny. In conjunction with the CMA’s willingness to take enforcement action, which may include action through the courts system, the obligation to comply with the CPR is one which online businesses should not take lightly.

“People who buy online should not be pressurised by practices implying that they must act quickly to avoid missing out, when this is not the case. We’ll be scrutinising these claims from Wowcher and if we find the company is using misleading online selling tactics, we won’t hesitate to take enforcement action – through the courts if necessary”. Sarah Cardell, Chief Executive of the CMA

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commercial, competition compliance, technology, private companies, public companies, information technology, blog, competition