Nick Glynne, chief executive of Appliances Direct owner Buy It Direct, has said the Competition and Markets Authority “is wrong to name our business without giving us sufficient time to respond” to its latest investigation.
Appliances Direct, Wayfair and Marks Electrical are being investigated by the CMA with new powers granted to the watchdog to tackle online pricing practices.
Glynne provided Retail Week with further details about the investigation, saying it revolved around whether Appliances Direct auto-added a recycling service to the basket for some customers and whether all of the retailer’s time-limited promotions were truly time-limited.
He said “it is too early to provide a comprehensive answer to this”, given the hundreds of promotional offers across the website.
“Managing this volume of promotions simultaneously is not easy, especially given our complex software codebase and the fast-moving nature of our environment,” he added.
”However, if any promotion continued beyond the time-specified deadline, then no customer would have lost out; in fact, they would only have gained.”
Glynne criticised the manner of the investigation, saying the business only found out about the accusation hours before the CMA press release went out this morning, leaving the business with little time to understand the problem.
He said: “Why couldn’t they have written to us privately, outlining any concerns, giving us a chance to rectify any problems? The assumption is that we had an intention and that they are going to make an example of us with their new powers.”
He added that the company sells over 2 million items a year and he was not aware of any customer complaints about their promotions.
“There is a significant, existential threat from unfair competition from Chinese exporters selling non-compliant goods, which often avoid duty and VAT, and don’t pay UK employment or environmental taxes,” said Glynne. “It’s a shame there isn’t the same focus from government bodies on creating a level playing field for UK retailers.”
A CMA spokesperson said in response to Glynne’s comments that naming the businesses and setting out some detail on the possible breaches is consistent with its policy to typically do so at the start of investigations.
They added that the prohibitions on falsely time-limited offers and automatic service opt-ins had been in place for some time and that time limited sales can create an artificial sense of urgency and put unfair pressure on consumers to make snap decisions.
”The CMA has made clear that it has reached no conclusions at this stage, and the business will have the opportunity to respond in due course,” the spokesperson added.
The CMA announces big moves on pricing practices
The CMA was granted new powers to investigate online pricing practices, including drip pricing − the incremental addition of fees during the checkout process, and pressure selling, under the Digital Markets, Competition and Consumers Act 2024 (DMCCA).
It said in its press release announcing the investigations that early enforcement action would be focused on the most egregious practices that are harmful to consumers, which it had identified following a major cross-economy review of more than 400 businesses in 19 different sectors.
The CMA also stated that ”Consumers need accurate pricing information to know they are getting a fair deal. This is important for consumer confidence when shopping online and impacts economic growth.”
The three retailers were among eight businesses, also including ticket sites, driving schools and a gym, to face the first investigations under the new rules. The watchdog is writing to 100 businesses across 14 sectors to express concerns about the way they approach fees and sales tactics.
Marks Electrical is being investigated for default opt-ins, while the investigation into Wayfair is around time-limited promotions.
Marks Electrical said in a statement that it prided itself on transparency, clear pricing and providing services “that customers consistently value”. It added that recycling, packaging removal and old-appliance collection services were highly popular with customers and remained “entirely optional”.
“Our checkout has endeavoured to present these services with clear descriptions, clear pricing and a simple one-click option to remove them. Product prices and service costs are shown separately and prominently, ensuring customers can make informed decisions before completing their purchase.
“Following initial engagement with the CMA, we have already taken proactive steps to further align the presentation of optional services with the CMA’s most recent expectations under the DMCCA. We will continue to work constructively with the CMA to ensure our customer experience remains both transparent and compliant.”
It added that it was proactively engaging with the authority and would cooperate fully with the investigation.
A Wayfair UK spokesperson said: “We take the CMA investigation seriously and are fully cooperating with the CMA to support its review. Our priority is to ensure that we continue to operate in full compliance with all regulatory requirements. We are currently partnering with the CMA on their investigation and so cannot offer further comment at this point.
“As a business built on offering great choice and the best possible value for our customers, we remain committed to ensuring our promotions and pricing are presented clearly, transparently, and responsibly.”
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