Who: Signet Trading Limited
Where: UK
When: February 2019
Law stated as at: August 2019
What happened:
Torfaen County Borough Council prosecuted Signet Trading Limited, which owns H Samuel, for breach of the Consumer Protection from Unfair Trading Regulations in relation to a promotion which was run on the H Samuel website.
Torfaen successfully argued that the promotion breached the law because the was pricing did not declare that there had been a lower intervening price and that the promotional price ran for longer than the item was originally available at full price. Both of which are contrary to Trading Standards guidance on how to run promotions in compliance with Consumer Protection from Unfair Trading Regulations.
The court fined Signet Trading Limited £60,000, despite the fact that the company only made £6,500 from the promotion and the court gave credit for a guilty plea. Signet was also ordered to pay costs of £13,382.
Why this matters:
Complaints in relation to online promotions are often dealt with by the Advertising Standards Authority in the UK. However, since the ASA does not have the power to fine advertisers, this means that fines and formal prosecutions for breaches of advertising law are less common in the UK. This decision is a timely reminder that these sanctions by local trading standards units remain possible.
The Consumer Protection from Unfair Trading Regulations in the UK are based on a European directive, so there is some consistency across the EU. However, the sanctions do vary. For example, in Germany, although this particular issue has not been considered by a German court, the Signet Trading Limited promotion would most likely constitute a breach of German Unfair Competition Law. However, the legal consequences would not be as severe as in the UK because such unlawful promotions could not trigger any fines. Rather, the risks for advertisers would be that consumer protection organisations or competitors could send cease and desist letters demanding undertakings or ask the courts to issue an injunction. In theory, competitors could also claim damages, but to do this they would need to prove actual loss, which is often practically difficult.
