CMA requires Groupon to improve its treatment of customers
The CMA is calling on Groupon to make swift changes to how it treats customers to ensure that it is complying with consumer protection law.
- Concerns that Groupon is failing to provide some customers with cash refunds and to deliver all products within advertised timeframes.
- CMA calls on Groupon to change its practices swiftly or face court action.
The Competition and Markets Authority (CMA) launched an enforcement investigation into Groupon UK, an e-commerce marketplace that offers discounts and deals for a range of products and services, in April 2021. It has now written to Groupon UK and other relevant Groupon Entities (together, “Groupon”) outlining its specific concerns.
Following its investigation, the CMA has found evidence that Groupon does not always provide customers with the refunds and other forms of redress, such as replacement items, to which the CMA considers they are legally entitled. In cases where customers have not been provided with the goods or services that they paid for, they are sometimes only offered Groupon credits instead of refunds.
The CMA is also concerned that the company is failing to ensure that:
- purchased vouchers can always be redeemed within the advertised periods
- descriptions of goods and services are accurate
- products are in stock and delivered within the advertised timeframes
- items are of a satisfactory quality
- customer service is satisfactory when customers contact them about problems
As well as potentially breaking consumer protection law, Groupon UK could be in breach of the formal commitments – known as ‘undertakings’ – that it gave to the CMA’s predecessor, the Office of Fair Trading (OFT), in 2012. As part of these commitments, Groupon UK pledged to ensure information on its website is not misleading and to comply with customers’ legal cancellation and refund rights.
Andrea Coscelli, CMA Chief Executive, said:
More people than ever are shopping online, especially over the last year. It is therefore essential that online businesses treat customers fairly and refund them money where due under consumer law.
Groupon must swiftly step up and do right by its customers if it wants to avoid court action.
Groupon now has the opportunity to respond to the concerns outlined in the CMA’s letter and to avoid court action by signing further undertakings to address the CMA’s concerns. This may include redress for consumers denied a refund and additional compliance monitoring.
For more information, visit the Groupon investigation web page.
Notes to editors
- Groupon UK is registered in the UK as MyCityDeal Limited.
- In addition to MyCityDeal Limited, we are writing to other relevant entities within the Groupon corporate group that we consider have engaged in conduct that may be contrary to consumer law: Groupon Goods Global GmbH (registered in Switzerland) and Groupon, Inc (registered in USA).
- Groupon is an online shopping platform that sells goods and services to consumers. It also partners with business to provide digital vouchers designed to help customers save money when shopping in-store and online. Customers purchase vouchers from Groupon’s website and app and use them to activate discounts at a range of businesses.
- The main provisions of consumer protection legislation relevant to the CMA’s concerns are the Consumer Protection from Unfair Trading Regulations 2008 (CPRs), the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) and the Consumer Rights Act 2015 (CRA).
- For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.