Case reference number: CRE-E-26964
Complainant: OFT own-initiative investigation
Investigation into: MyCityDeal Ltd trading as Groupon UK ('Groupon'), company number No.
07112363, with a registered office address at No 1, Liverpool Street,
London, EC2M 7QD (www.groupon.co.uk).
Update June 2012
The legal undertakings provided by Groupon in March 2012 have come into
effect. Groupon and the ASA will continue to provide the OFT with
details of any consumer complaints relating to matters within the scope
of the undertakings three, six and nine months following the provision
of undertakings. This is so the OFT can monitor whether the undertakings
are effective and Groupon is complying with them.
Separately, and as the market continues to develop, the OFT has written
to 35 daily deal companies to ask them to review their practices
following the OFT action against Groupon. The OFT has informed the daily
deal companies that the Groupon undertakings set a clear standard for
the entire sector. The OFT is monitoring complaints about unfair
commercial practices in this market and, where necessary, will take
targeted national enforcement action against firms using practices that
constitute serious breaches of the law. The OFT does not investigate
individual complaints and consumers that require consumer advice should
contact the Citizens Advice Consumer Service.
There were concerns about Groupon's trading practices including
reference pricing, ensuring sufficient supply, time-limited offers,
products/services not as advertised, products/services not delivered,
substantiation of claims, consumers not getting refunds when appropriate
and unfair terms.
The Consumer Protection from Unfair Trading Regulations 2008 (CPRs)
The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs)
The Consumer Protection (Distance Selling) Regulations 2000 (DSRs)
Enterprise Act 2002
OFT opened this investigation following complaints it received in
relation to Groupon's trading practices. As part of its investigation,
OFT also considered concerns that have been raised by the Advertising
Standards Authority ('ASA'), in light of complaints the ASA received.
As a result of its investigation, OFT formed the view that there were
specific examples of Groupon's practices which appeared to be in breach
of the CPRs, the UTCCRs and DSRs. In particular, OFT identified concerns
with reference pricing, advertising, refunds, unfair terms, and the
diligence of its interactions with merchants.
During the investigation Groupon engaged constructively with the OFT.
They cooperated throughout.
As required in this case under the Enterprise Act 2002, the OFT
consulted with Groupon to ensure that those practices are not continued
or repeated. Following this consultation, Groupon signed undertakings to
comply with the law. The undertakings require that Groupon does not
continue or repeat the conduct of concern in this case.
Groupon has also agreed to provide the OFT with details of any consumer
complaints relating to matters within the scope of the undertakings
three, six and nine months following the provision of undertakings. This
is so the OFT can monitor whether the undertakings are effective and
Groupon is complying with them.
Groupon has been warned that should evidence come to light that it is
breaching any of the undertakings, OFT may consider applying to court
for enforcement orders to ensure compliance with consumer protection
OFT has now closed its investigation into this matter having secured
these undertakings, subject to reviewing any consumer complaint
information from Groupon in the following three to nine months.
In December 2011, the ASA started to refer to OFT, complaints it
received that were within the scope of OFT's investigation. It will
continue to refer such complaints to OFT over the next three months
whilst Groupon improves its processes, after which, the ASA will resume
investigating any complaints it receives.