CCCS proposes guidelines on price transparency

Written on 30 Sep 2019

As previously highlighted in our regulatory update, the Competition and Consumer Commission of Singapore (CCCS) issued its proposed Guidelines on Price Transparency today (30 September 2019). This is the first set of guidelines under its consumer protection mandate that the CCCS has proposed since taking on the additional function of administering the Consumer Protection (Fair Trading) Act (CPFTA) in April 2018.  A copy of the proposed Price Transparency Guidelines is available on the CCCS’s website.

Details of the proposed Price Transparency Guidelines

The proposed Price Transparency Guidelines have been issued to assist suppliers of all consumer-facing industries in their display and advertisement of prices to avoid misleading consumers and infringing the CPFTA. The contents of the proposed Price Transparency Guidelines apply to both online and offline transactions. The proposed Price Transparency Guidelines are also meant to provide information on CCCS’s approach, positions and recommendations on the display and advertisement of prices going forward.

The proposed Price Transparency Guidelines include the following recommendations with respect to how suppliers should display and advertise their prices:

  • Drip pricing and pre-ticked boxes: Suppliers should ensure that any unavoidable or mandatory fees/charges (such as taxes or surcharges) are included in the total headline price. As good practice, suppliers should avoid using pre-ticked boxes to automatically include add-ons. If pre-ticked boxes are used, suppliers must provide proper disclosures of the goods or services offered, in a clear and prominent manner.
  • Price comparisons (with other suppliers): When comparing their price with others, suppliers should ensure that any representations or comparisons with other suppliers’ prices or the use of terms such as “cost price”, are not false or misleading.
  • Discounts: When comparing their price with a previous price to represent a discount, suppliers should use an actual, bona fide previous price (i.e. the usual price) that provides a legitimate basis for the price comparison.
  • Use of the term “free”: When using the term “free”, suppliers should ensure that any representation that the price is $0 or “free” is not false or misleading and any qualifiers, terms and conditions or subsequent/deferred charges should be stated upfront clearly and prominently.

CCCS Public Consultation on the proposed Price Transparency Guidelines

The CCCS is publicly consulting on the proposed Price Transparency Guidelines from 30 September 2019 to 21 October 2019. For ease of reference, the CCCS’s five questions for the public consultation are set out below: 

  1. Do you consider the proposed Price Transparency Guidelines to be clear and user-friendly?
  1. Does the proposed Price Transparency Guidelines enhance your understanding of what constitutes an unfair practice in relation to the display and advertisement of prices?
  1. Does the proposed Price Transparency Guidelines enhance your understanding of what actions to take or avoid or to take note of in relation to the pricing practices of drip pricing, the use of pre-ticked boxes, comparing prices, offering discounts and using the term “free’?
  1. Do you support the proposed actions that suppliers should take in relation to the pricing practices covered in the proposed Price Transparency Guidelines? Do you consider the proposed actions to be sufficient? Please provide details to explain your view.
  1. Are there any areas where you think CCCS should provide further clarification or consider changes and proposed actions? 

What this development means for your business and how we can help

The CCCS’s focus on price transparency was recently underlined, when it announced its closure of an investigation against a restaurant for engaging in an unfair practice, after the restaurant agreed to cease such practices. The restaurant had represented in its promotional materials on its website, social media page and in-store posters and menu that it was offering discounts for meals that were “for a limited period only” or would be “Ending Soon! 50% Discount”, when in fact they continued to be available for at least another two years from February 2016. The CCCS further noted that it is “closely monitoring other businesses that engage in similar unfair practices where consumers are made to believe that there is scarcity in the availability of goods or services through misrepresentation of discount or promotion periods”.

As the CCCS sharpens its focus on price transparency, businesses in Singapore should review their existing practices to ensure that they do not fall foul of the CPFTA. Please do not hesitate to get in touch with us if you wish to discuss how this development may impact your business operations in Singapore or if you require our assistance to respond to the CCCS’s public consultation.