EU eLab - Price Reduction Tool: detecting misleading discount announcements

The eLab has begun to develop bespoke tools for specific tasks, the first one to be tested, tackled the challenge of misleading price reductions. In 2022, the CPC network carried out the first automated sweep on misleading price reduction announcements. The tool created in eLab for this purpose uses AI and webscraping techniques to flag such discounts on a user-friendly graphic interface, and provides evidence (in this case Black Friday).

The EU has strict rules on promotional prices covered by Article 6(a) of the EU Price Indication Directive, which states that any advertised price reduction must indicate the prior price of the goods, and that this reference price must be the lowest price that the goods have been sold at over a 30 day period. Artificial price reduction might occur if the goods haven’t previously been on sale at a higher price over the 30 day period, or at a price that reflects the discount being promoted to consumers.

CPC Authorities staff can use this to catch a much wider range of potential infringements than sampling or complaints would allow, although the decision on whether it is an infringement still remains with the inspector.