Knowledge Highlights 16 November 2020
Following a self-initiated investigation under the Consumer Protection (Fair Trading) Act (“CPFTA”) which the Competition and Consumer Commission of Singapore (“CCCS”) commenced in April 2019, the operator of the Expedia Singapore website, BEX Travel Asia Pte Ltd (“BEX”), has ceased its false claims and undertaken not to engage in any further unfair practices in relation to the validity periods of its “Daily Deals” promotions effective from 12 November 2020. CCCS’ investigation was part of its market monitoring efforts. CCCS is closely monitoring consumer markets for possible unfair practices that harm consumers.
BEX was offering “Daily Deals” promotions, which involved the listing of certain “Daily Hotel Deals” and “Daily Package Deals” represented as “Hot deals for 24hrs only!” that would expire at 11:59pm in Singapore time on each calendar day, on the Expedia Singapore website at www.expedia.sg/dailydeals and through electronic direct mailers to consumers on BEX’s mailing lists. CCCS found that there were at least 55 “Daily Deals” offers where the promotional prices remained the same after 11:59pm, contrary to BEX’s representation that “These scorchin’ deals change daily at 12:00 AM (Singapore Time)”. CCCS’ view is that such false claims in relation to promotional prices mislead consumers into believing there is a price benefit which is only available for a limited period, thus creating unwarranted pressure or a sense of urgency for consumers to make an immediate purchase. CCCS also ascertained that BEX’s “Hot deals for 24hrs only!” offers expired in less than 24 hours.
CCCS concluded that these false claims constituted unfair practices which breached section 4(b) of the CPFTA. Section 4(b) of the CPFTA provides that it is an unfair practice for a supplier to make a false claim in relation to a consumer transaction. CCCS issued a warning to BEX for its breaches and accepted Bex’s undertaking to co-operate with CCCS to ensure compliance with the CPFTA as well as to do the following in relation to promotions that can be booked through the Expedia Singapore website:
- Comply with the CPFTA and promptly cease any unfair practices in breach of the CPFTA as it may discover in relation to communications (via any media) to consumers.
- Prevent conduct described in section 4(b) of the CPFTA from arising in relation to communications (via any media) to consumers.
- Ensure that promotions are not communicated to consumers (via any media) as being (i) available for a limited time period even though the promotion is expected to remain available after this time period; and (ii) valid for a specific time period where the promotion may cease before the specific time period expires, unless the limited availability of the promotion is clearly indicated in the offer terms and conditions.
CCCS reserves the right to investigate any breach of the undertaking or any unfair practices by BEX.
In its media release of 12 November 2020, CCCS stated that where suppliers (including suppliers which only provide booking services to consumers and suppliers that only promote goods and services (e.g. advertising platforms)) specify a time period during which a product or service will be sold at a discounted price, suppliers should state the time period for when the discount is actually valid clearly and prominently and not make false claims or otherwise mislead consumers.
Suppliers should review their business practices to ensure compliance with the CPFTA and may take reference from the CCCS Guidelines on Price Transparency (“Guidelines”), which serve to provide greater clarity on which pricing practices could potentially infringe the CPFTA. The Guidelines also include recommended good practices for suppliers. More information on the Guidelines can be found in our articles titled “CCCS Guidelines on Price Transparency effective 1 November 2020” and “CCCS Guidelines on Price Transparency - Understanding the risks and obligations in displaying and advertising prices”.
The following materials are available on the CCCS website www.cccs.gov.sg: