Groupon’s (NASDAQ:GRPN) troubles seem to continue in the U.K. even after the bakery fiasco that happened a couple of weeks ago. This time the Office of Fair Trading (OFT) is set to launch an investigation into the company for allegedly violating Advertising Standards Authority (ASA) regulations 48 times in the past 11 months.  Groupon leads the daily discount space competes with players like Google (NASDAQ:GOOG) and LivingSocial.
Groupon May Need to Clarify Deal Terms Further
The three specific concerns raised by the ASA over Groupon are:
1. Failure to conduct promotions fairly, such as not making clear significant terms and conditions;
2. Failure to provide evidence that offers are available; and
3. Exaggeration of savings claim
The above three concerns quite clearly indicate that while consumers might still love the hefty discounts offered by Groupon, merchants require more from the company to ensure that their businesses do not run into losses. Events such as a single overload of orders or lack of clarity in payment terms can have serious adverse consequences on merchants. Groupon might need to overhaul the terms and conditions provisioned for its merchants and customers, although it’s too early to speculate the exact impact of the OFT investigation.
- Is Groupon’s Stock Attractive At $21?
- Does Groupon Have Upside Once Pandemic Subsides?
- Why A Groupon-Yelp Deal Is A Bad Idea
- Groupon’s Presence AI Acquisition Is A Good Deal If It Didn’t Cost More Than $350 Million
- Groupon’s Q1 Weakness Likely To Remain In Q2, But The Outlook For The Year Isn’t All Bad
- Groupon Q4 Earnings: Key Takeaways
We recently launched coverage on our analysis of Groupon with a $13 price estimate. Refer to our note on why Groupon’s valuation has fluctuated significantly over the past 2 years.Notes: