Background
This Ruling forms part of a wider piece of work on mid-contract price rises, identified for investigation following complaints received. See also related rulings published on 9 October 2024.
Ad description
A webpage on the O2 website www.o2.co.uk, seen in April 2024, for the iPhone 15, described three different data plans: 150GB; 30GB; and 1GB. Bold text at the top of the page stated, “[obelisk symbol] Monthly price of your Airtime Plan will increase each April from April 2025 by the Retail Price Index rate of inflation announced in February each year plus 3.9%”. Information about each data plan was displayed underneath, which included the upfront and monthly fees, followed by an obelisk symbol. As the page was scrolled down, the information that the advertised prices would increase by the Retail Price Index rate of inflation plus 3.9% each year remained pinned to the top of the webpage.
At the bottom of the page, under the subheading “The legal bit”, text stated, “[obelisk symbol] Monthly price of your Airtime Plan will increase each April from April 2025 by the Retail Price Index rate of inflation announced in February each year plus 3.9%. If RPI is negative, we’ll only apply 3.9%. Find out more information at o2.co.uk/prices”.
Further text stated, “[obelisk symbol] Subject to Retail Price Index (RPI+3.9%)” “[obelisk symbol] Monthly price of your Airtime Plan will increase each April from April 2025 by the Retail Price Index rate of inflation announced in February each year plus 3.9%. If RPI is negative, we’ll only apply 3.9%. See o2.co.uk/prices”.
Issue
The complainant challenged whether the presentation of the mid-contract price increases was misleading.
Response
Telefonica UK Ltd t/a O2 said they believed the ad was clear and transparent in relation to the annual mid-contract price increases, and in their view, did not breach the CAP Code.They highlighted that the bold text at the top of the ad stated the price would increase each April by the Retail Price Index rate of inflation announced in February of each year plus 3.9%. That statement followed users down the webpage as they scrolled. As such, it enabled consumers to always be able to see the price rise information when they were looking at the pricing of the different airtime packages for the iPhone 15, and each price was linked to the visible price rise explanation by asterisk. O2 also said they did not include any claims that stated or implied the price would apply for the minimum term and so therefore did not contradict the qualification or banner.
Assessment
Upheld
CAP Guidance stated that the presence of and, if applicable, the nature of mid-contract price increases, were material information that consumers needed in order to make an informed transactional decision. Consequently, marketers were required to ensure that advertising for services that included mid-contract price increases included such information and that it was presented clearly and prominently. The guidance also stated that asterisks or links, which linked to information more than one ‘step’ below the price claim, were unlikely to give adequate weight to the significance of material information. The ASA assessed the ad in question against the Code.The ad described different phone contract packages alongside the length of each contract and the corresponding price per month of each package. The boxes containing the individual packages for the different contracts did not state within each box that the prices would be applicable until April 2025 without the need to click on a link. Each price was followed by an obelisk symbol which directed consumers to further information found underneath the list of packages, and again at the bottom of the page. However, the price claims and other information provided for each individual package did not state that the monthly price would be subject to an annual increase, nor the nature of that increase.
We understood that all of the advertised contract packages were subject to mid-contract price increases, and that after April 2025, the monthly price would increase by the rate of inflation plus 3.9%. We considered that information was material to a consumer’s decision to purchase or engage further with each of the packages.
We acknowledged that information regarding the price rise was included at the top of the page, before the listing of the packages, and that the information stayed pinned to the top of the page, in a banner and in bold text, as it was scrolled down. However, the banner was also on a white background, the same colour as the rest of the webpage, which we considered meant it blended into the page, and was not immediately distinguishable for consumers. Notwithstanding that, we considered that the information was not located sufficiently close to the monthly prices stated within the main body of the ad. As such, we considered it was not sufficiently clear from the ad that the featured monthly prices would increase before the end of the contract period, nor did the banner prominently provide information explaining the nature of such an increase, both of which we considered to be material information.
We then considered the qualification located under the contract package information at the bottom of the webpage, linked to by the obelisk symbols after the prices in the individual package’s boxes in the main body of the ad. The qualification explained that the monthly cost of each package would increase each April after April 2025 and outlined the nature of that price increase; specifically, that it would increase by the rate of inflation plus 3.9%. However, because that material information was not included within the main copy of the ad, nor given equal prominence to the price claim within the webpage, we considered that it had not been prominently or clearly displayed. Furthermore, we considered that if consumers did not scroll down past the information on the airtime packages, the information included in the qualification could easily have been overlooked because of its placement beneath the main body of the ad, and at the bottom of the page.
Because the presentation of the mid-contract price increases was not presented clearly, we concluded the ad was likely to mislead.
The ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.10 (Qualification), and 3.17 and 3.18 (Prices).
Action
The ad must not appear again in its current form. We told Telefonica UK Ltd t/a O2 to ensure that they made sufficiently clear that their contracts would be subject to mid-contract price increases, and that information about the nature of such price increases was presented prominently.
