Groupon Compliance: Protecting Customer Rights & Merchant Obligations, Lecture notes of Business

Download Groupon Compliance: Protecting Customer Rights & Merchant Obligations and more Lecture notes Business in PDF only on Docsity! 1 PART 8 OF THE ENTERPRISE ACT 2002 ('EA02') UNDERTAKINGS TO THE COMPETITION AND MARKETS AUTHORITY (THE ‘CMA’) UNDER SECTION 219 OF THE EA02 RELATING TO:  THE CONSUMER PROTECTION FROM UNFAIR TRADING REGULATIONS 2008 (THE ‘CPRS’); AND  THE CONSUMER CONTRACTS (INFORMATION, CANCELLATION AND ADDITIONAL CHARGES) REGULATIONS 2013 (THE ‘CCRS’); AND  PART 2 OF THE CONSUMER RIGHTS ACT 2015 (THE ‘CRA’). Groupon, Inc. of 600 West Chicago Avenue, Suite 400, Chicago, IL 60654, USA and its subsidiary Companies; Groupon Goods Global GmbH, registered office at c/o Bovadis Partner Treauhand AG, Oberstadt 3, Schaffhausen, Switzerland (‘Groupon Goods’); and MyCityDeal Limited trading as Groupon UK of Floors 11-12 Aldgate Tower, 2 Leman Street, London E1 8FA (‘Groupon UK’), each a ‘Company’ and together the ‘Companies’. Each Company, in respect of itself voluntarily gives the following undertakings to the CMA under section 219 of the EA02. For the avoidance of doubt, these undertakings do not amount to an admission that any person has infringed the law. UNDERTAKINGS In accordance with section 219(4) and section 219(B) of the EA02: (i) Groupon, Inc. undertakes in respect of all entities within the Groupon Corporate Group involved in the supply of Goods Deals or Services Deals to UK consumers:  not to engage in any conduct which contravenes paragraphs 1 to 53 below;  not to engage in such conduct in the course of its current business or another online-based sales business;  not to consent to or connive in the carrying out of such conduct by a body corporate with which it has a special relationship (within the meaning of section 222(3) of the EA02); and 2  to comply with the enhanced consumer measures (as such term is defined in s. 219A of the EA02) set out in Parts 4 and 5 below. (ii) each Company undertakes: a. on its own behalf; b. in respect of its current and future: 1. subsidiaries incorporated after the date of these undertakings within the meaning of section 1159 of the Companies Act 2006; and 2. interconnected trading companies within the meaning of section 223(4) of the EA02, c. in respect of any third party acting in its name with its authority or on its behalf with its authority, to comply with these undertakings. Interpretation When a date or time period is specified, the obligation must be met by 17:00 hours in the time zone of the United Kingdom on the relevant day. Defined terms are set out in Schedule 1. Part 1 - Advertisements and information about goods and services A. All Deals 1. This section A relates to advertisements and Information provided to consumers (whether online or otherwise) about goods and services to ensure they are not Misleading. 2. All statements and Information provided to consumers (whether online or otherwise) about goods or services must be accurate and Clear. 3. Where a Merchant provides a Merchant Notification that: a) Information about a Deal on the Website and App is inaccurate; or b) the Merchant cannot provide a Deal that is advertised (within the advertised timescale or at all), the Companies will ensure there are appropriate mechanisms in place for Merchants to be able directly to update their offering with accurate Information, or otherwise to: 5 i. prior to advertisements being placed on the Website and App, ensure that contractual obligations apply to Merchants, requiring them to ensure that: 1. goods conform to the description on the Website and App; and 2. an order for goods can only be placed by a customer where there is sufficient availability for the Merchant to provide the goods, ii. verify the content of the draft advertisement with the Merchant, consider any changes proposed by the Merchant, and amend the draft advertisement where appropriate; and iii. obtain written confirmation from the Merchant of: 1. the Unit Cap (where applicable, through a facility provided to Merchants to update details of Goods Deals automatically); and 2. where the Merchant will arrange delivery of the goods, the Delivery Timescale. 10. The relevant Company will put in place and maintain a mechanism to remove Goods Deals from the Website and App so that orders cannot be placed by customers in respect of Goods Deals where further orders would exceed any applicable Unit Cap, either by allowing the Merchant to remove the Goods Deal directly from the Website and App, or otherwise actioning requests by Merchants to remove Goods Deals within 1 working day of receipt of the request. Goods Deals offered for sale on a Marketplace 11. Paragraphs 12 to 13 apply where goods are offered for sale on the Website and App by a Merchant using a Marketplace. 12. Prior to advertisements being placed on the Website and App, the relevant Company will ensure that contractual obligations apply to Merchants requiring them to ensure that: a) goods conform to the description on the Website and App; b) goods are of satisfactory quality; c) goods comply with all laws applicable to the relevant Company; d) an order for goods can only be placed by a customer where there are sufficient stock levels to fulfil the order; e) the advertised Delivery Timescale is Clear, and, where the Delivery Timescale is an estimate, this is a realistic estimate; and 6 f) to the extent possible, the goods will be delivered within the advertised Delivery Timescale. 13. Where it operates a Marketplace, the relevant Company will ensure that: a) a facility is provided that allows Merchants to: i. remove Goods Deals from the Marketplace for any reason; and ii. adjust the Unit Cap, b) consumers are Clearly informed that Deals are provided by third parties; c) consumers are Clearly informed of the trading name or registered company name and address of the Merchant and customers are provided with a mechanism for contacting the Merchant through Groupon’s customer service function and/or other appropriate means; d) Merchants are provided with appropriate information, training materials and an appropriate code of conduct regarding how to provide and maintain accurate information about Goods Deals; and e) Merchants are subject to appropriate consequences, including suspending a Merchant from offering Deals on the Website and App for such period as the relevant Company considers appropriate if the Merchant: i. persistently fails to adhere to applicable contractual requirements, such as repeatedly failing to provide accurate information about Deals, repeatedly failing to adhere to Delivery Timescales, and repeatedly failing to satisfactorily address customer queries; and ii. has been referred to the Deal Investigation Team in accordance with paragraph 5 on more than three occasions. C. Services Deals 14. This section C applies to: a) Groupon UK; and b) Groupon Inc, which will ensure that Groupon UK which currently provides Service Deals, and any member of the Groupon Corporate Group that offers Services Deals on the Website and App in the future, complies with this section. 15. Where the relevant Company contracts with a Merchant to offer Services Deals, prior to advertisements being placed on the Website and App, the relevant Company will ensure that 7 contractual obligations apply to Merchants to ensure that: a) services conform to the description on the Website and App; and b) an order for services can only be placed by a customer where there is sufficient availability for the Merchant to provide the services. 16. Where the relevant Company contracts with a Merchant to offer Services Deals, prior to an advertisement for a Services Deal being placed on the Website and App, the relevant Company will: a) verify the contents of the draft advertisement with the Merchant, consider any changes proposed by the Merchant, and amend the draft advertisement where appropriate; b) obtain written confirmation from the Merchant of the Unit Cap (where applicable); and c) put in place a mechanism so that orders cannot be placed by customers for Services Deals where such an order would exceed any applicable Unit Cap, including actioning requests by Merchants to remove Services Deals within 2 working days of receipt of the request. 17. Where a relevant Company contracts with an Intermediary Third Party to offer Services Deals, prior to an advertisement for a Services Deal being placed on the Website and App, the relevant Company will ensure contractual obligations apply to the Intermediary Third Party requiring the Intermediary Third Party to ensure that: a) services conform to the description on the Website and App; b) an order for services can only be placed by a customer where there is sufficient availability for the Merchant to provide the services; and c) contents of advertisements are verified with Merchants. Application of Parts 2 and 3 – customer rights and customer service 18. Parts 2 and 3 relate to customers’ rights and customer service arrangements. 19. Where a Merchant provides customer service functions to customers, the relevant Groupon Group Company that engages with the Merchant to provide Deals on the Website and App will require the Merchant (through contractual terms and in any Merchant code of conduct or other terms of business with the relevant Groupon Group Company) to comply with the requirements of Parts 2 and 3. 10 offered on the Website and App, no statements are made: a) publicly; b) on the Website or App or elsewhere; or c) by any customer service agents when communicating with customers, that the relevant Groupon Group Company or Merchant is not liable to, or does not as a matter of policy, provide such remedies. 29. The Companies will ensure that Escalations are only made by Groupon Group Company customer services agents where such action is reasonable and appropriate, given the particular circumstances of the issue raised by the customer, including but not limited to where: a) it is unclear what remedies can practically be provided, or should be provided, to the customer; and b) tracking information about goods ordered in respect of a Goods Deal is reasonably unavailable. 30. The Companies will ensure that there is an effective policy in place so that any Escalations are dealt with promptly. At the latest, the relevant customer will receive an update about an Escalation within 7 days and a proposed solution within 14 days, such solution being in line with the statutory remedies set out in Part 2 of these undertakings. 31. The Companies will ensure appropriate customer service systems are put in place so that customers can swiftly and effectively: a) raise a query, concern or complaint, b) initiate and continue contact with the customer services function, including by: i. enabling customers to communicate effectively with customer service agents, for example by telephone, messaging services and/or email, with Dropped Contacts being minimised as far as reasonably possible; ii. ensuring customers receive a response to an initial request to be contacted within 24 hours of the initial contact, unless reasonably impracticable in the circumstances; iii. ensuring customers receive a response to commencing a chat on an instant messaging service within 60 seconds, unless reasonably impracticable in the circumstances; and 11 iv. ensuring customers receive a final response to any complaint promptly, and in any event within 14 days, unless reasonably impracticable in the circumstances, c) where appropriate, enabling customers to swiftly and effectively contact the relevant Merchant to raise a query or complaint, including by: i. Clearly informing customers who have purchased a Deal how to contact the Merchant; and ii. contractually requiring Merchants to handle customer complaints satisfactorily, including the requirement to: (i) use reasonable efforts to respond to customers within 1 working day of their initial contact to the Merchant, and (ii) resolve complaints within 7 working days, d) in circumstances where the Merchant does not provide a response to the customer within 7 working days, or where the response is unsatisfactory, ensuring the query, concern or complaint is considered and addressed by the customer services function, to ensure the customer is provided with their statutory rights. This shall not preclude the relevant Companies from giving Merchants additional time to resolve where this is reasonable due, for example, to the complexity of the issue raised in the customer contact. Part 4 – Refunds to Affected Customers 32. Part 4 sets out the requirements to pay Refunds for Affected Customers for Deals purchased on the Website and App. 33. The provisions of Part 4 apply to Deals sold by Groupon Goods and Groupon UK. Groupon Inc will ensure the measures in Part 4 are complied with by Groupon Goods and Groupon UK. 34. The relevant Company will offer a Refund to every Identified Customer who purchased a Deal on the Website or App. 35. From the day after the date of these undertakings, each Company will not dispute a chargeback relating to a Purchase by an Identified Customer; and to the extent any chargeback has been successfully disputed by a Company, that Company will offer a Refund to each such of its Identified Customers. 36. The offer of a Refund to Identified Customers will be made within 7 working days of the date of these undertakings. Each offer of a Refund will be made by communicating its availability Clearly to every Identified Customer by sending an email, such email to include a request that Identified Customers provide up to date payment details in order to facilitate any Refund. The content of the email to Identified Customers will be agreed with the CMA in advance. 37. Where an Identified Customer does not respond to the initial email, the relevant Company will make further efforts to contact that person in order to obtain payment details and issue a Refund, by checking the email address used against the relevant Company’s records and updating it accordingly if necessary and sending at least two further emails with Clear subject 12 headings indicating the subject matter. The relevant Company will record the steps it takes to attempt to contact such Identified Customers. 38. Upon request from any of the Identified Customers in response to the email contact, the relevant Company will issue a Refund within 14 calendar days of receipt of that customer’s request. 39. In any instance where Groupon issues a Refund to an Identified Customer under the terms of this Undertaking and that Identified Customer has previously been provided with Groupon Credits (which are not expired) as an alternative to a Refund in connection with the same Purchase, Groupon may deduct the Groupon Credits from the customer's account in an amount equal to the monetary value of the Refund. 40. The Companies will ensure a Clear and prominent notification (the content of such notification to be agreed in advance with the CMA) regarding the availability of Refunds for Affected Customers is displayed on the homepage of the Website and App within 7 days of the date of these undertakings. The notification will be included on the homepage of the Website and App for at least 60 days from the date of these undertakings and will enable Affected Customers to contact the relevant Company for a Refund. 41. The relevant Company will consider each customer contact received in response to the notification in paragraph 40 above, and within 7 working days assess whether the customer is an Affected Customer. If the relevant Company has assessed the customer contact as being from an Affected Customer, it will: a) contact the Affected Customer to inform the Affected Customer that the relevant company will provide a Refund and ask for payment details; and b) issue a Refund within 14 calendar days of receipt of the Affected Customer’s response. 42. Where an Affected Customer does not respond, the relevant company will make efforts to contact the Affected Customer, using all reasonable endeavours, to obtain payment details and issue a Refund, and will record the steps taken to contact the Affected Customers. Part 5 – Compliance 43. Part 5 applies to Groupon Goods and Groupon UK. Groupon Inc will ensure the undertakings in Part 5 are complied with by Groupon Goods and Groupon UK, and any relevant company in the Groupon Corporate Group. Compliance measures 44. The Companies will together appoint at least one Undertakings Compliance Officer, whose contact details shall be provided and kept updated to the CMA, who will be responsible for: a) ensuring compliance with these undertakings; 15 ii. an assessment of the Companies compliance with paragraphs 1 - 31 of the undertakings. 51. The Companies will produce a report to the CMA within 10 working days after the end of each three month period throughout the Review Period, such report to cover the preceding three month period. The first such report shall be due on 20 January 2022 covering the preceding three month period, subsequent reports shall cover the next three month period. 52. Each report provided under the preceding paragraph shall include: a) an assessment of the steps taken to comply with Part 4 of these undertakings as applicable, including: i. the total number of Identified Customers and the total value of the Refunds provided by each Company with respect to those Purchases; ii. the total number of customers who contacted the Companies in response to the notification in paragraph 40 and whether those customers: 1. will receive, or have received, a Refund, together with details of the relevant Purchase and the reasons for such decisions; or 2. will not receive a Refund, together with details of the relevant Purchase and the reasons for such decision; and 3. the total value of the refunds provided by each Company with respect to those Affected Customers, iii. in respect of every payment of a Refund which has not been processed or where the Refund has not left the relevant Company’s bank account within 14 calendar days, in accordance with Part 4 above, the steps that the Company has taken to make that Refund, and the reasons why the Refund has not been made yet; b) copies of the reports regarding the Mystery Shopping Exercises required under paragraph 50(b) above; c) details of the issues referred to the Deal Investigation Team as required by the undertakings during that period, and the steps taken in respect of any such issues; and d) details of the Deal Audit Team’s review during that period, and the steps taken in respect of any issues identified by the Deal Audit Team’s review. 53. The Companies will ensure appropriate staff members, including the Undertakings Compliance Officer and appropriate members of the Deals Investigation Team and the Deals Audit Team, are available to discuss compliance with the Undertakings with the CMA at least quarterly, if requested by the CMA. 16 BY SIGNING THESE UNDERTAKINGS THE COMPANIES ARE AGREEING THAT THEY WILL SEVERALLY BE BOUND BY THEM. THESE UNDERTAKINGS REPRESENT A COMMITMENT IN RELATION TO FUTURE COMPLIANCE BY THE COMPANIES WITH CONSUMER PROTECTION REGULATION AND PRACTICE. THESE UNDERTAKINGS DO NOT AMOUNT TO AN ADMISSION THAT ANY PERSON HAS COMMITTED ANY CRIMINAL OFFENCE OR OTHERWISE INFRINGED THE LAW. IF HAVING SIGNED THIS THE COMPANIES BREACH ANY OF THE ABOVE UNDERTAKINGS, THEY ARE AWARE THAT THEY MAY BE THE SUBJECT OF AN APPLICATION TO THE COURT FOR AN ENFORCEMENT ORDER UNDER SECTION 215 OF THE EA02. THE CMA WILL CONSIDER VARYING OR TERMINATING THE UNDERTAKINGS, EITHER UPON REQUEST FROM THE COMPANIES OR UNDER THE CMA’S OWN INITIATIVE, WHERE THERE HAS BEEN A CHANGE OF CIRCUMSTANCES SUCH THAT THE UNDERTAKING IS NO LONGER APPROPRIATE IN DEALING WITH THE ISSUES IT WAS DESIGNED TO REMEDY (E.G. IF THE UNDERTAKING IS AFFECTED BY NEW LEGISLATION OR CHANGES IN MARKET CONDITIONS). Signed on behalf of Groupon Inc by: Signed on behalf of Groupon Goods Global GmbH by: Signed on behalf of MyCityDeal Limited trading as Groupon UK by: 20 b. were offered an alternative option to a Refund (whether or not accompanied by an offer of a Refund) and have not fully redeemed that alternative option in respect of a Purchase. q) “Information” means any information about a Deal, including, but not limited to, information regarding the underlying goods’ or services’: a. description and characteristics; b. for Goods Deals, availability and Delivery Timescale; and c. for Services Deals, period of availability. r) “Inspect” includes at a minimum but is not limited to: a. a visual inspection, and b. an inspection of the product’s operation regarding its intended use. s) “Intermediary Third Party” means, for Services Deals where the relevant Company only contracts with an intermediary third party that in turn contracts with Merchants for the provision of certain inventory, that intermediary third party. t) “Marketplace” means a function on the Website and App where third party Merchants offer Goods Deals direct to customers. u) “Merchant” means a third party supplier of goods or services on the Website and App that is not part of the Groupon Corporate Group. v) “Merchant Notification” means Merchant contacts in relation to advertised Deals. w) “Misleading” means information that: a. is false or otherwise misleading in its overall presentation; b. omits or hides information, or provides information in a manner that is unclear, unintelligible, ambiguous or untimely; and c. causes or is likely to cause the average customer to take a transactional decision he would not have taken otherwise. x) “Mystery Shopping Exercise” means searching for and making a Purchase of goods or services on the Website or App, without the Companies being made aware of the timing or target of such search and Purchase, with frequency and scope to be agreed with the CMA. 21 y) “Purchase” means the purchase of Deals on the Website or App. z) “Problem” means a customer experiencing one or more of the following in respect of a Deal: a. In respect of Purchases relating to Goods Deals: i. non-delivery of the goods ordered, within the advertised Delivery Timeframe or at all; ii. goods were not as described; iii. goods were of poor quality; and iv. goods were not fit for purpose. b. In respect of Purchases relating to Services Deals: i. non-availability with the Merchant, including but not limited to instances where the Merchant: (i) was fully booked, (ii) would not allow a voucher to be redeemed and (iii) had ceased operating, temporarily or permanently; ii. service was not as described; and iii. service delivery was of poor quality. aa) “Refund” means a cash or otherwise bankable method of payment of the total sum that a customer (including Identified Customer or Affected Customer, as relevant in the context) has paid in respect of the Purchase (less any amount already previously refunded in cash). For the avoidance of doubt ‘Refund’ does not include a voucher or credit note. bb) “Relevant Period” means from and including 1 October 2018 to the date of these undertakings. cc) “Review Period” means a period of three years from the date of these undertakings. dd) “Services Deals” means advertisements for services on the Website and App currently under the category “Local”. ee) “Unit Cap” means the total maximum available number of goods or services (as applicable) for a particular Deal that are to be provided. ff) “Website” means the groupon.co.uk website (in any form, including but not limited to ‘desktop’, ‘mobile’ and ‘App’ based formats) and, unless otherwise agreed with the CMA, the requirements of these undertakings will also apply equally to any other internet-based site, platform or facility (in any form, including but not limited to ‘desktop’, ‘mobile’ and ‘App’ based 22 formats) operated by or on behalf of a company within the Groupon Corporate Group which is directed in any way to UK consumers.