The CMA was concerned about Emma’s use of reference prices and discount claims. One of the key issues was whether a higher “was” price was genuinely meaningful, especially where relatively few sales had been made at that higher price. The CMA asked the Court to impose a fixed volume requirement, often described as a 1:2 FVR, which would broadly require one sale at the higher reference price for every two sales at the lower discounted price.
The Court did not agree to impose that fixed 1:2 approach. Mr Justice Richards accepted that some breaches had occurred, but held that assessing whether a reference price is misleading is not simply a mathematical exercise. Sales volumes at the higher price are relevant, but they are not the only factor. The Court said the assessment should consider the overall picture, including whether the reference price was genuine or realistic, how long it was offered for, what consumers would understand, and the wider market context.
The Court therefore declined to make the enforcement order in the form sought by the CMA. Instead, the parties were directed to consider whether they could agree alternative wording for any enforcement order, taking account of the principles set out in the judgment.
This is a useful case because it shows that consumer protection work often involves judgement, not just applying a simple rule. When looking at discount claims, officers need to consider evidence carefully and ask whether the average consumer is likely to be misled about the price advantage being offered.
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