Groupon to be investigated by OFT over trading practices

Groupon: OFT to probe daily deals service over its trading practices
Groupon: OFT to probe daily deals service over its trading practices

The Office of Fair Trading (OFT) is to investigate Groupon over complaints it has received about the daily deals service's trading practices.

In addition to receiving complaints directly, the OFT has been passed complaints by the Advertising Standards Authority (ASA).

The ASA referred the company to the OFT after finding it in breach of the advertising code nearly 50 times this year.

The advertising watchdog said it had "serious concerns" about Groupon's ability to adhere to the code and it was "in the public interest" for the OFT to address any underlying issues concerning its trading practices.

Groupon offers daily deals ranging from beauty treatments to restaurant discounts, which only go ahead if enough people commit to buy them. It advertises these deals on its site and via email. The company has been valued at nearly $13bn (£8.3bn) after it recently floated.

Complaints against Groupon were first received by the ASA in April 2010 and its first formal adjudication was in December last year.

This year, the ASA has formally investigated and upheld complaints against Groupon's ads on 11 occasions. It has also resolved 37 cases informally.

At the start of the year, the ASA rapped Groupon over two ads for restaurant discounts and an ad for a safari experience, on the basis they misled consumers.

The most recent was last week, when the ASA banned a promotion ad for cosmetic surgery over complaints it made consumers rush into a decision.

Rival services LivingSocial and kgb have also been found in breach of the Advertising Code this year.

A Groupon spokeswoman said: "Groupon constantly strives for business practices that are in the best interest of consumers.

"We are constantly evolving business process to ensure customers receive the best possible experience at the highest standards. We are cooperating fully with the OFT to ensure that the rights of consumers are protected."

Follow Sarah Shearman on Twitter: @Shearmans


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage
Ash runs Tinder experiment to show smokers are less desirable to opposite sex
British Airways teams up with Gerry Cottle Jnr for summer of rooftop film screenings
Arklu says 'girls can be superheroes too' with doll design competition
Coke enters squash market with Oasis Mighty Drops
Virgin Galactic signs up Land Rover as space flight sponsor
Motorola marketer Andrew Morley departs as Google gears up for sale to Lenovo
US Airways apologises after tweeting obscene image at a customer