Two UK carpet companies have agreed to amend their pricing practices following objections from the Office of Fair Trading (the “OFT”), the UK competition regulator. The companies have given undertakings to the OFT not to advertise recommended retail prices (“RRP“) that were not genuine and to use phrases such as “closing down sale” without being clear about the terms of the promotion.
Although phrasing such as “closing down sale” is not usually taken seriously by savvy UK consumers, the OFT considered the practices contrary to The Consumer Protection from Unfair Trading Regulations 2008 which contain a general prohibition against unfair commercial practices and misleading actions, misleading omissions and aggressive commercial practices.
Pricing policy and RRP remain a hot topic throughout the EU with competition authorities. This action by the OFT is the latest in a long line of pricing enforcement actions. Companies, especially those from the US, are strongly advised to take legal advice whenever considering European pricing strategy and distribution to avoid pitfalls unique to the European market.