OFT punishes Groupola over 'misleading' iPhone 4 sale

The Office of Fair Trading has taken action against a website that heavily promoted a sale on Apple's iPhone 4, despite the fact it only had eight handsets in stock.

According to the OFT, Markco Media, the company behind the website Groupola, had used ‘bait pricing' to promote a sale of iPhone 4 smartphones for just £99. At the time, the iPhone 4 normally cost around £500.

The OFT said the company had used the offer to "entice consumers to join Groupola and receive daily email alerts from the company".

A promotional campaign for the iPhone sale included a press release, a national newspaper interview and marketing on social-networking sites Facebook and Twitter.

A Groupola employee also acted as an "ordinary consumer" and made positive comments about the company on its Facebook page. Following the campaign, nearly 15,000 people registered with Groupola for the sale.

As a result of the OFT investigation the company will no longer be able to promote or carry out similar promotions nor will employees be able to make comments about the company online without clearly stating they work for the Groupola.

When the sale started, people who tried to buy the discounted iPhone 4 were left disappointed. Customers were not informed that only eight handsets were available.

The OFT said the sale did not make it clear that the handsets had sold out, with a caption stating ‘202 bought' also being displayed alongside the product.

Heather Clayton, senior director of the OFT's consumer group, 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."