ACM has fined online stores for using fake discounts

The Netherlands Authority for Consumers and Markets (ACM) has imposed fines totaling 621,000 euros on five online stores for using fake discounts. The online stores offered multiple products with discounts on misleading ‘was-prices’. As a result, consumers were shown fake discounts. In reality, the discount was lower or none was offered at all. As a consequence, consumers were misled.

Cateautje Hijmans van den Bergh, Member of the Board of ACM, adds: “Price is one of the most important characteristics of a product on which consumers base their purchase decisions. Fake discounts make consumers think they are getting an interesting deal, even though that’s actually not the case. Consumers must be protected against this practice. The fines that we have imposed today are an important signal that this has to stop.”

Fines

Since 1 January 2023, ACM has enforced compliance with the tightened rules on ‘was/now’ prices. The basic principle is that discounts can only be given on the lowest price for which a product was offered in the 30 days prior to that discount.

ACM has fined five online stores. ACM has imposed a fine of 163,000 euros on Dutch online store Day Trayders (www.koopjedeal.nl) for using fake discounts on its website. ACM has imposed a fine of 130,000 euros on Dutch furniture retailer Leen Bakker (www.leenbakker.nl), which also used fake discounts. These companies have not acknowledged these violations. They still have the opportunity to take legal action against these fines.

In addition, ACM has fined three other companies. These companies did acknowledge the violations, and have promised to mend their ways. That is why they received lower fines. ACM has imposed a fine of 110,000 euros on fashion retailer G-star (www.g-star.com), a fine of 112,500 euros on Danish furniture retailer JYSK (www.jysk.nl), and a fine of 105,500 euros on Tommy Hilfiger (nl.tommy.com).

What did these companies do wrong?

ACM saw that companies repeatedly offered products with fake discounts. According to the law, companies must present the lowest ‘was-price’ that was used as the selling price in the 30 days prior to the discount. If an incorrect ‘was-price’ is presented, consumers will think that they are getting a higher discount than is actually the case. In some cases, no discount was offered at all, and the price actually went up.

One company offered a product that ‘was’ 699 euros and ‘now’ 629 euros, whereas, in the thirty days prior to this discount (during a previous sale), the product was 539 euros. As a result of the incorrect ‘was-price’, consumers see a discount, while, in reality, the product became more expensive. This is therefore a fake discount.

Another company presented a fake discount by artificially increasing the ‘was’ price of a product. The product that ‘was’ 149.99 euros was ‘now’ offered for 99.99 euros. One day later, the same product ‘was’ offered at 199.99 and ‘now’ at 99.99 euros. The increase in the ‘was’ price makes the discount seem larger. The incorrect ‘was’ price of 199.99 euros was never used as the selling price during the studied period.

Over the past few months, ACM has checked the discounts of online sellers in the clothing, consumer electronics, and bedding-store sectors. With today’s decision, ACM has fined the companies with the most violations. Over the next few months, ACM will hold warning conversations with all investigated companies that did not comply with the rules on ‘was/now’ prices.

In the future, ACM will continue to investigate clear prices and fair discounts. It is important that consumers can rely on the price information they encounter. Companies must be honest about the prices and discounts that they offer and, in that context, cannot mislead consumers. In addition, it is a form of unfair competition if companies with clear prices compete with companies with unclear prices.