CCCS warns food delivery platform for misleading advertisement

25 November 2024

The Competition and Consumer Commission of Singapore (“CCCS”) has recently issued a warning to a food delivery platform for a misleading advertisement which promoted “Unlimited Free Delivery on All Restaurants” (“Advertisement”) for subscribers (“Subscribers”) of its subscription plan which offers exclusive deals (“exclusive subscription plan”). According to a media release published by CCCS on 20 November 2024, Delivery Hero (Singapore) Pte. Ltd., more commonly known by its lead brand “Foodpanda”, displayed the Advertisement across multiple platforms including its Instagram page, its in-app marketing, and on billboards and signages at public areas such as bus stops. The Advertisement ran from 1 July to 30 September 2024 (“Advertising Period”).

CCCS’s investigation

CCCS started investigations in August 2024 after receiving a complaint about the Advertisement which promised “unlimited free delivery on all restaurants” for Subscribers. In the absence of any qualifiers, consumers could be misled into thinking that Subscribers would enjoy free delivery on all restaurants available on the food delivery platform.

CCCS had found that over 40% of food delivery transactions made by Subscribers on all restaurants over the Advertising Period required a residual delivery fee to be paid after discounts were applied. Instead of “free delivery on all restaurants”, Subscribers only received a S$3 discount for all restaurants, or a discount of up to S$6 for selected restaurants in respect of food delivery fees.

Following the investigation, the food delivery platform has acknowledged CCCS’s concern and agreed to:

• fully refund subscription fees to customers who subscribed during the Advertising Period;
• provide clarification to customers who had subscribed during the Advertising Period and the public on the terms of the subscription; and
• review existing and future marketing materials for the exclusive subscription plan to comply with Singapore’s fair trading laws.

CCCS will take stronger enforcement action against the food delivery platform if it continues to engage in any misleading advertisements.

Businesses should be careful when using absolute terms like “free”

CCCS also stated that businesses must ensure that any claim about the price of a good or service as being “$0” or “free” must be genuine and not misleading. Such explicit representations must clearly and unambiguously reflect what is offered to consumers. If there are qualifiers, exclusions, and incidental costs, these must be prominently disclosed alongside the “$0” or “free” claim. Businesses should not rely on a generic disclaimer such as “terms and conditions apply”, which is not usually sufficient.

Reference materials

The media release is available on the CCCS website www.cccs.gov.sg.