G-Max risks million-penalty

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According to the Norwegian consumer authority G -Max may have misled customers through their promotional campaigns.

Now the sports chain risks a penalty up to a million NOK.

CO, the Consumer Ombudsman, in Norway pre-warned Gresvig retail this week that a prohibition decision will be made since G-Max had sales campaigns without a real original price.

This is illegal , according to the Marketing Council . After a prohibition decision has been made and coercive determined, G-Max-stores have to pay imposed daily fines if  they break the law again

“Common practice in these cases are compulsory fines of between 800,000 and one million NOK” , says Counsel Frode Elton Haug in the Consumer Ombudsman to DN.no.

The reason for the notification of the prohibition decision are two email campaigns G -Max sent out in October and November last year, offering 25 percent off . The competitor XXL appealed G -Max to the Consumer Ombudsman.

“For a marketed discount to be considered as real , it is thus required that the prices of goods actually decreased compared to the lowest price of the goods have been sold for the six – week period prior to the sale , ” states the letter from the CO.

It was only four weeks and four days between the two email campaigns and the Consumer Ombudsman ” find it highly probable ” that G -Max in it’s first email offer in November did not take into account the first email and the price reduction of 25 percent was therefore not real .

“Gresvig believes that there is no legal basis to adopt a prohibition decision . The current promotion is legal. In addition, a decision would be in contrary to the administrative law requirements of equal treatment of market participants” , says lawyer Terje Sverdrup Marten on behalf of G -Max .

“It would be surprising if not XXL also receive notification. There are numerous complaints on XXL in illegal price comparisons , where illegal sales marketing is especially prevalent”, claims lawyer Sverdrup Marten .

Consumer Ombudsman’s legal director Frode Elton Haug confirms to dn.no that the Commissioner also considers XXLs marketing campaigns.

“We have recently gone through a lot of sports marketing industry and is now working on several cases . If there is a notification of the decision , we can not say anything about before any letter has gone out to those concerned.”

“We do not expect any prohibition decision by the Consumer Ombudsman . It will surprise if we were to get it, and several of our competitors are ahead in the queue in that way”, says CEO Fredrik Steenbuch, XXL

Previously, Anton Sport ( 2013 ), Gresvig Retail ( 2012) and the Oslo Sports Equipment ( 2006) has been notified by coercive prohibition decision .None of these have had to pay money. They have complied with the resolutions and adjusted their marketing efforts.