Are retailers going to have to tell you where to buy your products cheaper?

2 March 2015

Old-FridgeHow much easier would it be if, whichever retailer you were shopping with, shops actually had to tell you  if a competitor was offering an identical product at a better price? Well that is actually what happened in a civil Court of Appeal case last week, the decision in which has had retailers scrambling to determine if the ruling is binding on them, and would cause them to fall foul of EU consumer protection laws.

The case in question concerned whether a company was required to notify consumers that the services it offered for a charge could be obtained by the consumers acting directly for free. PLT Anti-Marketing Limited (PLT) offered to register consumers' names and contact details with the Telephone Preference Service (TPS) and the Mail Preference Service (MPS) in return for £4 monthly subscription, but neglected to tell consumers that they can register with the TPS and MPS for free.

In its ruling, the Court of Appeal considered to what extent businesses would need to disclose information about the availability, quality and price of rival products and services to consumers to comply with EU consumer protection laws, saying that the disclosure of such information “will be necessary in some situations” to ensure businesses are not considered to be making  'misleading omissions' when selling their own goods or services to consumers.

However, Lord Justice Briggs did refer to the need to recognise the ‘average consumer’ and whether or not the average consumer can be relied upon to "shop around" for such information, therefore removing the disclosure obligations from traders. In his decision, the judge found that a reasonable consumer would indeed shop around, so that this was an acceptable starting point for retailers.

"Generally, inward-facing information is likely to be available only from the trader in question, because it is information about that trader, or its goods or services. By contrast, information about alternative or competing products may generally be supposed to be available in the marketplace, to the extent that a particular consumer wishes to obtain it before deciding whether to make a purchase from the trader in question. In short, shopping around for information about alternative products (whether goods or services) is characteristic of the reasonably well-informed, observant and circumspect consumer,"  said LJ Briggs in making his decision.

So will this decision have any effect when you next visit an electrical retailer to buy a new fridge, for example? Commercial contracts expert Rami Labib of Pinsent Masons thinks not.

"Although it remains to be seen how the principles established by the Court of Appeal will be applied in future cases, our interpretation is that businesses will only need to notify consumers about the availability of alternative products and services on the market in exceptional cases," Labib said. "For most businesses, the ruling will not demand a change to marketing materials or business practices."

So while this ruling might be a further way to clamp down on so-called ‘copycat’ websites, where websites pop up to charge consumers for a service that is normally available for free or at a nominal charge, it seems Currys don’t have to tell you if your fridge would be cheaper if you bought it from Apollo2000. Never mind.

TOPICS:   High Street News

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