Groupon Faces Investigation by U.K. Office of Fair Trading

Groupon, one of the largest Internet daily-deal sites, is under investigation by Britain’s competition regulator. The regulator is inspecting the possibility of unfair promotions and exaggerated savings.

No surprise here because the U.K. Office of Fair Trading started looking into Groupon’s British unit last July. The investigation recently expanded due to the fact that the office received a complaint from the country’s advertising watchdog — breaking advertising regulations almost 50 times in less than a year.

“Given Groupon’s track record, we have serious concerns about its ability to adhere to the advertising code,” the Advertising Standards Authority said in a statement, according to Bloomberg News. “It is in the public interest that we refer the matter to the OFT.”

Groupon’s headquarters are in Chicago and the social shopping platform is doing fairly well since initiating its IPO at the beginning of November, raising $700 million and selling 35 million shares at $20 each. The biggest opening by a U.S. internet company since Google first sold shares in 2004. Yesterday, Groupon rose 8.3% to $18.95 in New York trading, but has been under performing the market since its launch.

In an email statement Groupon wrote, “We are constantly evolving [the] business process to ensure customers receive the best possible experience at the highest standards. We are cooperating fully with the OFT to ensure that the rights of consumers are protected.”

Related Stories
Mediabistro Course

Social Media Metrics

Social Media MetricsStarting September 4, work with a social media manager to monitor, measure and optimize your social media efforts! Danielle Brigida will teach your how to sift through web analytics, Facebook Insights, and Twitter mentions to develop a comprehensive reporting and tracking system for your brand. Register now!