The Consumer Ombudsman took furniture store Kruunukaluste Oy to Market Court in November 2017 and called for the Market Court to prohibit the company from comparing its sales prices to the recommended retail price or recommended price if this price does not reflect the general market price. The Consumer Ombudsman also demanded that the company be prohibited from comparing the sales price to its own previous sales price if it could not prove that it had ever charged the alleged comparison price for the product. The Consumer Ombudsman also demanded an injunction on Kruunukaluste for using the expression SALE in marketing if the products are not sold at lower prices than before.
According to the Market Court, Kruunukaluste’s practice gave consumers misleading information on the company’s actual price level, which was likely to cause consumers to make purchase decisions that they would not have made without this information. The Market Court considered the Consumer Ombudsman’s demands to be justified and issued injunctions on the company in accordance with the requirements of the Consumer Ombudsman. The Market Court included a conditional fine of EUR 50,000 in the injunctions.
“Fabricated discounts hamper the consumers’ understanding of the normal price levels, which is why this kind of misleading marketing must be completely eradicated. This was once more confirmed by the Market Court’s decision,” says Consumer Ombudsman Katri Väänänen.
Discounts must be genuine
Kruunukaluste had marketed the discounted prices of its products on the company website using comparison prices for a period of several consecutive months. According to the company, the comparison price referred to the supplier’s recommended price and the sales price previously charged for the product.
However, Kruunukaluste could not demonstrate to the Consumer Ombudsman that it had ever charged a sales price equivalent to the comparison price for the product or that the comparison price stated for the product reflected the product’s general market price. Kruunukaluste had also communicated that the products were discounted using the expression SALE!, even though the products were not being sold at lower prices than previously.
A healthy price competition and discounts on products benefit consumers. However, misleading comparison prices and discount percentages as well as the expression SALE used by Kruunukaluste hamper the consumers’ understanding of the store’s normal price levels and of the actual size of the advertised discount.
Extensive monitoring of the price marketing of furniture companies
The Consumer Ombudsman has placed the marketing of furniture companies under special scrutiny since 2016 in order to determine how percentages, comparison prices or other expressions referring to discounts are used in the marketing of the companies in the field.
Monitoring showed that comparison prices, discount percentages and other expressions referring to discounts are used in the marketing of furniture to create an impression of major discounts. However, the products may never have been offered at the stated comparison prices at all, and the discount percentages have not always been genuine.
Before submitting the matters to be decided by the Market Court, the Consumer Ombudsman provided Kruunukaluste with guidance on statutory requirements and Market Court case law as well as had negotiations with the company in an effort to reach an amicable settlement. As the company did not change its marketing despite the guidance provided and their promises to do so, the Consumer Ombudsman issued an injunction against it in summer 2017. Since Kruunukaluste opposed the injunction, the Consumer Ombudsman took the company to Market Court.
Further information:
- Market Court Decision, MAO:2017/704
- The Consumer Ombudsman issued an injunction against four furniture stores due to misleading advertising. FCCA press release, 13 October 2017