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Case Details

Case Details
National ID 2015/450
Member State Finland
Common Name MAO:385/16
Decision type Court decision, first degree
Decision date 27/06/2016
Court Market Court
Subject
Plaintiff Kuluttaja-asiamies (Consumer Ombudsman)
Defendant Maskun Kalustetalo Oy
Keywords discounts, misleading advertising, selling price

Unfair Commercial Practices Directive, Annex I, 7. Unfair Commercial Practices Directive, Annex I

Discount sales that continue for a period exceeding three months during a calendar year are considered as misleading for consumers and therefore prohibited. Likewise prohibited are discount sales which portray an understanding that the product is offered at a discounted price only for a short limited period of time when in reality the same product is sold with the same price immediately or almost immediately after the sale period.
The Market Court had prohibited the defendant from continuing or renewing a practice that is misleading to consumers. The defendant had been obliged to comply with the prohibition on pain of a 100,000 Euro penalty payment. The prohibition included a prohibition to continue discount sales and the demand of presenting the true price of the discounted product. The plaintiff demanded that the court orders payment of the penalty payment because the defendant had breached the prohibition given by the Market Court. In addition, the plaintiff demanded that the penalty payment is increased to 300,000 Euro and that the Market Court prohibits the defendant from using expressions that specifically refer to discounts in situations in which the advertising period exceeds three months and from presenting a claim that falsely indicates that the discounted product is available for a certain price only for a short period of time if the product is in fact sold on the same price immediately or almost immediately after the discount has ended.
According to chapter 2 section 6 of the Consumer Protection Act, untruthful and misleading information shall not be given in marketing or customer relationship if they might lead to the consumer making a purchasing decision or another decision related to the consumer good that he or she would not have made without the said information. The defendant’s marketing might have led to a confusion about the defendant’s normal prices and, by implication, about the actual benefit of the offered discount. Therefore, the practice had been against the Consumer Protection Act. There is a list in Annex I of Directive 2005/29/EC on commercial practices that are unfair in all circumstances. A false notification that the product is available only for a limited time or that it is available for certain conditions only for a limited time in order for the consumer to make the purchasing decision immediately, is included in the list. Consequently, the defendant’s practice had also breached the Directive.
Are continuous discounts considered to be misleading for consumers? How many months during a period of one year are discount sales allowed?
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The defendant’s practice had breached the previous prohibition decision of the Market Court. The Market Court ordered the penalty fine of 100,000 Euro to be paid in full. In addition, the Market Court first held that prohibition must hereon be complied on pain of a 200 000 Euro penalty payment. The Market Court prohibited the defendant from using expressions that specifically mean discount unless the time period of using such expressions is less than three months during a calendar year. Second, the Market Court held that the defendant was also prohibited from using a claim in marketing that states that the product is available for a certain price only for a limited period of time if in reality the same product is sold for the same price immediately or almost immediately after the sale period. The first point of the prohibition must be complied with on pain of a 200,000 Euro penalty payment whereas the second point on pain of a 100,000 Euro penalty payment. The rest of the Consumer Ombudsman’s demands were dismissed.