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UK Regulator Sues Emma Over Alleged Misleading Sales Tactics

By  |  October 28, 2024

The UK’s Competition and Markets Authority (CMA) has filed a lawsuit against the sleep product company Emma, accusing the retailer of using misleading online sales practices. According to Yahoo News, the CMA’s decision comes after a prolonged investigation into Emma’s marketing strategies, which include the use of urgency tactics such as countdown timers and high-demand prompts. These practices, the CMA contends, may create unnecessary pressure on consumers, leading them to make hasty purchasing decisions.

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    The CMA’s scrutiny of Emma’s sales methods began in 2022 when concerns were raised that certain promotional tactics could exploit shoppers’ fear of missing out. The CMA previously called on Emma to change its approach and align its marketing with consumer protection laws. Though some adjustments were made, the competition watchdog believes Emma has not fully complied with all requested modifications, particularly concerning reference pricing, per Yahoo News.

    “We have given Emma sufficient opportunity to alter the way it does business to address our concerns,” said George Lusty, the CMA’s Interim Executive Director of Consumer Protection and Markets. “They have failed to make all the changes that we require, which is why we’ve progressed to court action,” he continued. Lusty emphasized that sales techniques, when used misleadingly, can influence customers into spending more than they intended by making them feel they are in a race against the clock.

    Emma still has the option to resolve the matter by consenting to an official order or by agreeing to provide certain assurances in court. The CMA’s action is part of a broader crackdown on what it views as unfair online sales tactics that can create undue pressure on consumers. Under its Online Choice Architecture program, the CMA has already seen results in similar cases: for instance, Simba Sleep, another mattress retailer, made formal changes to its pricing practices after a CMA investigation highlighted concerns.

    In a significant regulatory shift, from April 2025, the CMA is expected to gain direct authority to identify consumer law breaches and impose penalties of up to 10% of a company’s global revenue, subject to judicial appeals. This upcoming power could give the CMA more robust tools to enforce compliance across various sectors. In August 2024, following CMA guidance, Simba Sleep revised its marketing to ensure that any listed “was” price genuinely represented an earlier selling price, thus enhancing transparency for consumers.

    Source: Yahoo News