Penalty of EUR 300,000 imposed to Maskun Kalustetalo for misleading discount marketing

The Market Court has ordered Maskun Kalustetalo to pay a penalty payment of EUR 300,000 for misleading discount marketing. The Consumer Ombudsman had called for a higher penalty payment of EUR 1 million. This is the first instance of the Consumer Ombudsman requesting a penalty payment for a company.

The Consumer Ombudsman’s demand for a penalty payment was based on the Consumer Ombudsman’s report finding that Masku had announced discounted prices based on rates that the company had not actually charged. Sofas were sold at a discount much more often than they were at normal prices, which created a misleading impression of price levels and affordability.

According to the Market Court, Masku’s marketing with repeated discounted prices in a campaign-like manner with sums that were quantitatively significant has been likely to obscure consumers’ understanding of the normal price level of the marketed sofas and, consequently, the actual benefit of the discount. According to the Market Court, Masku must have understood that it was taking a risk of violating the Consumer Protection Act and its conduct that has been careless at the least.

Deviating from the Consumer Ombudsman’s demand, the Market Court imposed a penalty payment of EUR 300,000 on Masku. The Market Court argued the amount of the payment by the fact that the Consumer Ombudsman’s report did not, after all, indicate a generalised practice by Masku.

The decision by the Market Court is not yet legally binding. The Consumer Ombudsman will examine the decision and decide if they will appeal to the Supreme Administrative Court.

Penalty payment requested due to prohibitions and periodic penalty payments not being effective

The Consumer Ombudsman brought the demand for a penalty payment to the Market Court in July 2022. Since July 2020, the Consumer Ombudsman has had the opportunity to propose to the Market Court that it imposes a penalty payment on a trader that deliberately or negligently acts to the detriment of consumers and violates or neglects the essential rights of consumers. The Consumer Ombudsman now exercised this means for the first time.

At the request of the Consumer Ombudsman, Masku’s marketing has been dealt with three times by the Market Court. By its decisions (in Finnish) MAO:655/09, MAO:68/11 and MAO:385/16, the Market Court has prohibited Masku from engaging in discount and offer marketing in violation of the Consumer Protection Act and has twice sentenced Masku to pay periodic penalty payments to enforce the prohibition. The prohibitions imposed by the Market Court and the periodic penalty payments imposed to enforce the prohibitions have not had the desired effect on Masku’s marketing.

Rules for discount sales made stricter at the start of the year

Misleading offers and discounts have also been addressed with stricter legislation. Starting from 2023, sellers must indicate in their marketing the lowest price at which the products have been marketed in the 30 days preceding the price reduction. The aim is that consumers can better assess the extent of individual discounts or the overall price level of products. This change also aims to prevent the seller from temporarily and artificially increasing the price of the product and then offering the product at a significant discount.