ASA Adjudication on MyCityDeal Ltd
MyCityDeal Ltd t/a
Groupon UK
1 Liverpool Street
London
EC2M 7QD
Date:
7 December 2011
Media:
Internet (sales promotion), E-mail
Sector:
Leisure
Number of complaints:
4
Complaint Ref:
A11-167440
Ad
An e-mail and website promotion, for Groupon, stated "One Year Midweek Delivery Pass Plus £40 Worth of Groceries for £39 from Ocado (£110 Value)". Further text stated "Those in need of a Groupon grocery guardian can receive assistance with £40 worth of groceries, as well as a one year midweek delivery pass, usually priced £69.99, to summon their defender vendor bearing Grouponic goods throughout the year for no extra fee ... Groupon holder will become eligible to sign up for a one year midweek delivery pass (£69.99 Value) within seven days of receiving ordered groceries".
Issue
Four complainants, who saw the ads in July 2011 and did not believe the value of the midweek pass was £69.99, challenged whether they were misleading.
CAP Code (Edition 12)
Response
Ocado Ltd (Ocado) said the One Year Midweek Delivery Pass was a new product that was launched on 28 July. They said the offer was displayed on the Groupon website on 28, 30 and 31 July. They said they used to word "value" as opposed to "was" or "usually" because the pass was a new product that had not yet been sold for 28 days at that price and therefore had not been price established. They also believed the word "value" made clear that £69.99 was the price at which customers would purchase the pass outside the offer and into the foreseeable future. They submitted a list which they said showed that customers had purchased the one year midweek delivery pass through Ocado, for £69.99, while the Groupon offer was running. They also submitted screenshots of their data management system which they said demonstrated that the customers referred to in the list paid £69.99 for an annual midweek pass. They also submitted a screenshot of their website, from 30 August, and said this showed the price at which customers outside the offer were able to purchase their various delivery passes, including the One Year Midweek Delivery Pass for £69.99.
They understood the complainants did not believe that the value of the midweek annual pass was £69.99 because, on 28 July, Ocado's website stated that a six-month midweek pass was £14.99. Ocado said, because they did not have any price-fix guarantees, they had no legal or regulatory requirements to state that the price of the six-month pass was directly proportional to the annual pass, or that the prices of either passes should be fixed and referred to their delivery pass terms and conditions which stated "Ocado reserves the right to change the membership fee for future renewals or memberships from time to time". They said, because the six-month midweek pass was a different product from the annual midweek promotional pass, and was subject to change within six months, it was unreasonable for consumers to assume that the value of an annual midweek pass equated to the price of two six-month midweek passes.
Groupon agreed with Ocado's response.
Assessment
Upheld
The ASA noted the complainants did not believe that the value of the midweek annual pass was £69.99 because, on 28 July, the Ocado website stated that a six-month midweek pass was £14.99, and that an annual pass would therefore cost no more than £29.98. We noted the One Year Midweek Delivery Pass was a new product offered by Ocado and was launched on 28 July, which was the same day the offer first appeared on the Groupon website. We noted, from a screenshot provided by the complainant that, on 28 July, the Ocado website indicated that a six-month midweek pass cost £14.99. We also noted from this screenshot that an annual pass was offered at £69.99 for the first year. However, we noted this annual pass entitled customers to deliveries on any day of the week and was not limited to midweek deliveries as offered by the promotional pass. We noted Ocado submitted a screenshot from their website, from 30 August, that indicated that an annual midweek pass, with the same terms as the promotional pass, cost £69.99. However, we also noted this information was not available to readers on 28 July.
We noted Ocado said the midweek annual pass had not yet been price established, but that the value was based on the price at which the pass was currently and would continue to be sold. We also noted the list submitted indicated that, between 29 July and 31 August, various customers had signed up to an annual scheme and that the screenshots demonstrated that, these same customers had paid £69.99 for a midweek delivery pass, with the same terms as the promotional pass. However, we considered most readers would understand the claim "... a one year midweek delivery pass, usually priced £69.99 ... a one year midweek delivery pass (£69.99 Value) ...", to mean that £69.99 was comparable to the price at which an identical or similar, pre-existing product, offered by Ocado, was generally sold. In the absence of any evidence that compared the value of the promoted pass at £69.99 with an equivalent product, or that demonstrated how this price was calculated, we considered the "value" of the promotional item had not been substantiated and therefore concluded that it was misleading.
The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation), 3.17 (Prices) and 3.39 (Price comparisons).
Action
The ad must not appear again in its current form. We told Groupon to ensure statements of value were an accurate representation of the price at which the product was normally offered. We also told them to make clear the manner in which price statements were calculated.
