Groupola, which originally launched as a Groupon-clone in the UK but has since pivoted to become a daily deal aggregator, has been found by the UK’s Office of Fair Trading of operating ‘bait pricing’ in its much publicised iPhone promotion held last year.
At the time, Groupola’s biggest crime was that its website crashed throughout much of the day of the group buying promotion, leading some consumers to suggest it was a scam. How many iPhones were actually on sale was what most hopeful punters wanted to know, so we asked. Two hundred handsets was the official answer – also repeated on Groupola’s Facebook page – when in actual fact, says the OFT, it was just eight.
Specifically, the OFT’s investigation found that Markco Media (which operates the Groupola website along with MyVoucherCodes.co.uk) used ‘bait pricing’ – having only a small proportion of stock available at the advertised offer price – to promote a sale of iPhone 4s at £99 (normal retail price was £499) to entice consumers to join Groupola and sign up to receive daily email alerts from the company.
The OFT was “also concerned about misleading comments made by one Groupola employee on the company’s Facebook page at the time of the sale. The employee represented himself as an ordinary consumer and made positive comments about the company.”
Good old ‘astroturfing’, eh.
But that’s what we have regulators like the OFT for, right? You’d think so but in this case Groupola’s punishment is to sign a letter saying they won’t do it again.
That’s alright then.
Here’s the official statement on today’s ruling from Mark Pearson, Chairman of Markco Media:
“We would of course like to apologise to anyone who was disappointed with the promotion that we ran in July 2010. We worked closely with the Office of Fair Trading during their enquiries to ensure that nothing like this happens again. When the issue first arose, nearly 9 months ago, we immediately carried out our own internal investigation as to the cause of the problems and the members of the team responsible for the promotion are no longer with the company.”