Knowledge Highlights 20 October 2020

According to a media release of 16 October 2020 issued by the Competition and Consumer Commission of Singapore (“CCCS”), the owners and operators (“Parties”) of “ABC Bargain Centre”, “Valu$”, and “ABC Express” retail outlets (collectively, “Retail Outlets”) have voluntarily undertaken to cease the use of “Closing Down Sale” and “Fire Sale” advertisements at all Retail Outlets from 30 September 2020.

The Parties have voluntarily undertaken not to advertise any products as being available at a discounted price for a limited period of time at the Retail Outlets where the Parties know or ought to know that the products will continue to be so available for a substantially longer period, unless the Retail Outlet in question is genuinely ceasing operations. The Parties will also not advertise products as being available at a discounted price at the Retail Outlets where no genuine price benefit or advantage underlying the advertisement exists.

CCCS’ view is that the “Closing Down Sale” and “Fire Sale” advertisements which were displayed continuously at the Retail Outlets without any end date can mislead consumers into believing that there is a price benefit, and that the benefit would only be available for a limited period. Advertisements which mislead consumers constitute an unfair practice in breach of the Consumer Protection (Fair Trading) Act (“CPFTA”).

The Parties will use all reasonable efforts to ensure that all franchised Retail Outlets comply with the same voluntary undertakings, and will cooperate with CCCS on an ongoing basis to meet the obligations and comply with the CPFTA.

In accepting the Parties’ voluntary undertakings, CCCS took note of the Parties’ co-operation to ensure that its advertising practices comply with the CPFTA. The Parties had approached CCCS in 2019 to discuss advertisements bearing the language “Closing Down Sale” and “Fire Sale” displayed at the Retail Outlets. However, CCCS reserves the right to investigate any breach of the undertakings or any other unfair practices by the Parties.

CCCS closely monitoring other businesses using similar unfair practices

CCCS is closely keeping an eye on other businesses that use similar unfair practices, where consumers are made to believe that there is a price benefit, and a scarcity in the availability of discounted prices for goods or services through misrepresentation of discounts or promotion periods. CCCS encourages suppliers to review their business practices to comply with the CPFTA.

CCCS Guidelines on Price Transparency

On 7 September 2020, CCCS had announced the publication of the Guidelines on Price Transparency (“Guidelines”). The Guidelines which aim to provide greater clarity on what pricing practices could potentially infringe the CPFTA will apply to all suppliers, whether operating online or in physical stores, from 1 November 2020. To ensure compliance with the CPFTA, suppliers may refer to the Guidelines for greater clarity on which pricing practices could potentially infringe the CPFTA. More information on the Guidelines can be found in our Alert titled “CCCS Guidelines on Price Transparency effective 1 November 2020”.

Reference materials

The following materials are available on the CCCS website www.cccs.gov.sg:

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