The CMA is calling on Groupon to make swift changes to how it treats customers to ensure that it is complying with consumer protection law.
The Competition and Markets Authority (CMA) launched an enforcement investigation into Groupon UK, an e-commerce marketplace that offers discounts and deals for a range of products and services, in April 2021. It has now written to Groupon UK and other relevant Groupon Entities (together, “Groupon”) outlining its specific concerns.
Following its investigation, the CMA has found evidence that Groupon does not always provide customers with the refunds and other forms of redress, such as replacement items, to which the CMA considers they are legally entitled. In cases where customers have not been provided with the goods or services that they paid for, they are sometimes only offered Groupon credits instead of refunds.
The CMA is also concerned that the company is failing to ensure that:
- purchased vouchers can always be redeemed within the advertised periods
- descriptions of goods and services are accurate
- products are in stock and delivered within the advertised timeframes
- items are of a satisfactory quality
- customer service is satisfactory when customers contact them about problems
As well as potentially breaking consumer protection law, Groupon UK could be in breach of the formal commitments – known as ‘undertakings’ – that it gave to the CMA’s predecessor, the Office of Fair Trading (OFT), in 2012. As part of these commitments, Groupon UK pledged to ensure information on its website is not misleading and to comply with customers’ legal cancellation and refund rights.
Andrea Coscelli, CMA Chief Executive, said:
More people than ever are shopping online, especially over the last year. It is therefore essential that online businesses treat customers fairly and refund them money where due under consumer law.
Groupon must swiftly step up and do right by its customers if it wants to avoid court action.
Groupon now has the opportunity to respond to the concerns outlined in the CMA’s letter and to avoid court action by signing further undertakings to address the CMA’s concerns. This may include redress for consumers denied a refund and additional compliance monitoring.