Who: The Competition and Markets Authority (CMA), and Emma Sleep GmbH, Emma Matratzen GmbH, Emma Sleep UK Limited and other firms in the same corporate group and their directors (together “Emma Sleep”)
Where: United Kingdom
When: 7 July 2023
Law stated as at: 7 August 2023
The CMA has concluded its investigation into Emma Sleep’s online selling practices and found that the group’s use of countdown timers and presentation of discounts was likely to have misled consumers.
The investigation into Emma Sleep was launched by the CMA in November 2022 as the first of the CMA’s “online choice architecture” enforcement programme – see our Insight for further background.
In short, the CMA’s principal concerns related to the following conduct:
- Countdown timers: Emma Sleep used countdown timers on its website to create a sense of urgency for consumers. The CMA held that these timers were often misleading as the end of the timer did not accurately reflect the availability of discount prices – once the sale finished, it was quickly replaces by another.
- Was/now pricing: Emma Sleep’s use of “was/now” pricing was found by the CMA to be misleading, as only a small fraction of Emma Sleep products were actually sold at the full “was” price, such that the discounted “now” price did not represent a genuine saving.
In light of the findings, the CMA has called on Emma Sleep to change its online sales practices and agree to undertakings.
Why this matters:
The Emma Sleep investigation was the first action taken by the CMA as part of its online choice architecture related enforcement. Online choice architecture – otherwise known as “dark patterns” – describes the design methods used by traders to influence a consumer’s choices online.
The CMA is clearly taking a serious look into online sales practices, particularly time-limited claims, in an e-commerce context. Since launching the Emma Sleep investigation, the CMA has published an open letter on misleading online urgency and price-reduction claims – see here.
Our view is that the risk dial is only set to ratchet up when it comes to urgency-based and other potentially misleading claims – in addition to the increased enforcement focus by the CMA. If the Digital Markets, Competition and Consumers Bill passes as anticipated, the CMA will have the power to issue turn-over based fines without going to court.
And while the CMA does not (yet!) have the power to issue administrative penalties, the very public nature of the CMA’s Emma Sleep investigation should serve as a useful reminder for businesses to review promotional campaign material carefully, as well as online interfaces, to ensure that claims and the presentation of the user journey does not mislead consumers.