Dutch consumer watchdog issues discount pricing guidelines

The new guidelines (720KB/ 8 pages) encourage businesses to adopt a transparent approach to price reductions and comparisons to ensure that any price reduction advertised on a product is genuine and not misleading. In particular, they highlight the country’s strict pricing rules that sellers must clarify their discounts by comparing the reduced price with the lowest price that they charged in the 30 days preceding the discount.

Nienke Kingma, an Amsterdam-based expert in digital commerce, welcomed the new guidelines. “The base line is that sellers must clarify their discounts by comparing the reduced price with the lowest price that they charged in the 30 days preceding the discount,” she said. “In practice you often see that retailers compare their offers with prices that never actually existed.” 

Businesses are encouraged to review their pricing strategies and ensure all discounts and price comparisons are clear, honest, and in line with the new guidelines. Sellers are permitted to indicate a recommended price, but they must also offer a price reduction using a ‘was/now’ price. In such a scenario, the competition authority says the seller must make the price reduction overtly clear by using different colours, fonts or different font sizes or some other means.

ACM offers five ‘rules of thumb’ to businesses to ensure any discounts offered to consumers are not misleading. These are: not including crossed-out prices except for the lowest price; no fake price reductions; no artificially inflated prices; no excessively long price reductions; and ensuring that all information is presented clearly and prominently.

The guidelines underscore the regulator’s growing focus on pricing strategies following increased concerns over the prevalence of ‘fake’ discounts online – including where starting prices have been temporarily increased to make the discount appear greater, or a discount has been promoted on a recommended retail price that has never been used.

Thijs Kelder, an expert in legal frameworks governing digital content and products within the EU digital single market, said the guidelines indicated this was an important area of focus for the ACM. “Discounts and pricing practices have been on the authority's radar for a long time,” he said. “The ACM has previously fined online stores for violating the rules. Most of the cases were about misleading 'before-prices', also called 'strike through pricing'. This demonstrates the priority of the ACM.”

ACM said the guidelines apply to all businesses who offer discounts via sales channels, whether online, through an app or in brick-and-mortar stores. It emphasised that it will be monitoring whether physical stores and online marketplaces are complying with the discount rules and that it had “various enforcement” powers in the event of non-compliance. It also said that anyone who suspects a business of unfair pricing can report it via the ACM ConsuWijzer.

Angelique Bret, London-based competition law and consumer protection expert in Pinsent Masons’ global antitrust, competition and trade group, said: “The new Dutch guidance aligns with the growing focus across the EU and in the UK – where the Competition and Markets Authority has published detailed guidance – on tackling a range of misleading and deceptive trading practices that may infringe consumer protection rules and harm consumers. The ACM is amongst Europe’s most active competition and consumer law regulators, it will therefore be interesting to see how its new guidelines are implemented by businesses and enforced by the authority in practice.”