Discounts that are not really discounts and blacklists for customers who return too much: practices like these have earned Yoox Net-a-Porter a fine of 5.25 million euros in Italy.
The Autorità Garante della Concorrenza e del Mercato (AGCM, the Italian competition authority) has found that the luxury fashion platform misled customers for years with fake discounts and committed breaches of the right of withdrawal. The fine is a hefty setback for Farfetch and the owner of Dubai Mall, which bought into luxury group Richemont‘s e-commerce platform last year.
The AGCM received several complaints about Yoox between 2019 and 2022, and also found infringements itself. It found, for instance, that the fashion retailer unilaterally cancels orders and blocks customers who return orders too often. Remarkably, these consumers were not notified of this: only when they contacted customer service after a completed order was cancelled, were they told they were blacklisted.
25 % more = 50 % off?
The competition watchdog also signalled a real policy of fake discounts: the platform regularly adjusted its prices upwards just before promotional offers. Even with discounts, the price came out the same as (or even higher than) before. After 1 February 2022, it started regularly showing the reference price not as the previous price in the webshop, but the price prevailing in physical shops. That way, the discount seemed bigger than it actually was.
In one case, a customer had bought a handbag for 65 euros, after which it supposedly reduced in price five days later. During the promotion, the handbag was advertised for as much as 82 euros, against a reference price of 169 euros – supposedly a 50 % discount, in practice a 25 % rise. In terms of misleading prices, Yoox did already improve its policy during the course of the investigation, the AGCM said. The e-commerce platform now has sixty days to tell the market authority how it will improve further.