The Consumer Ombudsman has started proceedings in the Market Court against Scandinavian Outdoor Oy, SGN Sportia Oy, L-Fashion Group Oy and Kruunukaluste Oy. Conditional fines of EUR 100,000 are proposed in order to enforce the injunctions.
The Consumer Ombudsman has placed the online marketing of sports equipment and furniture companies under special scrutiny since August 2016 in order to determine how comparison prices, percentages or other expressions referring to discounts are used in the marketing of the companies in the field. The intention has been to assess whether the discounts marketed to consumers are real.
Before submitting the matters to be decided by the Market Court, the Consumer Ombudsman has provided these companies with guidance on statutory requirements and Market Court case law as well as had negotiations with the companies in an effort to reach an amicable settlement. As these companies have not changed their marketing despite the guidance provided and their promises to do so, the Consumer Ombudsman issued injunctions against them in summer 2017. As the companies objected to the injunctions, the Consumer Ombudsman took them to the Market Court.
In addition to taking these companies to the Market Court, the Consumer Ombudsman has issued an injunction against Suomen Retkitukku Oy and notice of a conditional fine to enforce the injunction. The company did not demonstrate that it had ever charged the comparison price for the products that the injunction was based on. The company’s marketing was such that it was likely to hamper consumers’ understanding of the normal price levels of the company and, consequently, of the actual benefit of the reduced prices.
The aim of using comparison prices and discount percentages is to create the impression in the minds of consumers that the discounts are considerable. Healthy price competition and occasional discounts on products benefit consumers. However, misleading comparison prices and discount percentages hamper the consumers’ understanding of the store’s normal price levels and of the actual size of the advertised discount.
The primary objective of the Consumer Ombudsman is to make the company acting in breach of the law stop doing so, or to persuade it to change its actions voluntarily. If necessary, the Consumer Ombudsman takes any coercive measures required in the case, or refers the matter to be heard by a court of law. In practice, an injunction enforced with a penalty payment is issued in such situations. A decision on the injunction is made by the Market Court, based on an application submitted by the Consumer Ombudsman.
The Consumer Ombudsman may also impose injunctions directly in cases deemed to be of lesser significance in terms of the application of the law or otherwise. An injunction becomes void if the company announces that it objects within a given time limit.
The Market Court and the Consumer Ombudsman may both issue a notice of a conditional fine in order to lend force to the injunction. If, despite the ban, the company continues to act illegally, the Consumer Ombudsman may request the Market Court to order that the conditional fine be paid.
Further information:
- The Consumer Ombudsman issued an injunction against four furniture stores due to misleading advertising. The FCCA press release 13.10.2017.
- The The Consumer Ombudsman issued an injunction against seven sports shops due to misleading advertising. The FCCA press release.28.6.2017.
- Consumer Ombudsman tells sports shops to give up recommended retail prices and recommended prices. The FCCA press release 2.3.2016.
- Consumer Ombudsmans’ decisions and rulings (in Finnish). The FCCA website.
- Consumer decisions in the Market Court and in the Supreme Court (in Finnish). The FCCA website.