The Office of Fair Trading has threatened UK’s discount website, Groupola, of court action if it repeats anything similar to its iPhones offers last year.
Last year millions of consumers tried to log on to the website within minutes after the company announced the then newly released iPhone4 for £99, about £400 less than its retailing price.
Groupola also showed a chart showing that about one-quarter of the phones had been sold, and a caption suggested that about 1,000 phones were available.
However, the claims were found to be erroneous after the OFT investigated into the matter. It found that just eight phones were available.
The OFT has heavily criticised Groupola saying what the company did was "bait advertising", which is a ploy to attract customers with misleading information so that they end up purchasing something else.
OFT’s Heather Clayton said competitive markets and economic growth need fair and transparent promotional activity and the Groupola case demonstrates that enforcement action will be taken when necessary.
The company took e-mail details of the participants and investigations also revealed that a Groupola employee had praised the offer in the garb of an ordinary customer.
Clayton said, "It is never acceptable for traders to pretend to be independent consumers. It is increasingly the case that people make purchasing decisions based on online peer recommendations and the OFT will continue to prioritise cases that protect the integrity of online consumer reviews and comments."
Groupola chairman Mark Pearson has apologised and said that the company has removed the people responsible for the promotion.
Pearson said, "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."
