‘Inherently Misleading’: Lawsuit Alleges Udemy Advertises Videos at False Discounts to Generate Sales

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A proposed class action alleges Udemy, Inc. has falsely advertised “original” reference prices that mislead customers into believing they are purchasing the company’s instructional video courses at a discount.

According to the 22-page case, the video courses offered for sale on Udemy.com are never actually sold at the “strikethrough” price advertised next to the videos’ sale price and are worth substantially less than consumers are led to believe. Per the case, the “fictitious original price” listed for each product serves only to inflate its perceived value and coerce consumers into paying more for the instructional videos than they otherwise would.

“In effect,” the complaint states, “Defendant’s scheme trick [sic] consumers into justifiably believing they are getting a significant deal—when, in reality, consumers are paying the usual retail price for products.”

The lawsuit relays that under California law, retailers are not permitted to advertise a product as discounted from its “original” price for more than 90 days unless they also disclose the date on which the item was last offered for sale at the represented “original” price. Per the suit, this law is meant to protect consumers from “false reference pricing,” i.e., when a retailer advertises a false “original” price to trick customers into believing they are receiving a “deep discount” so as to artificially raise the market price of the item. As the complaint tells it, this practice allows retailers to command a premium for products worth less than unsuspecting consumers are led to believe:

According to the lawsuit, Udemy frequently advertises its instructional video courses for a purportedly discounted price by including a strikethrough reference price next to the sale price. For example, the complaint relays, a video entitled “The Web Developer Bootcamp” on Udemy.com displayed an original price of “$199.99” next to a representation that the product was “94% off” at a price of “$10.99.”

The case alleges, however, that the web developer video and Udemy’s other products are never actually sold for the advertised strikethrough reference price and only labeled as such as part of the company’s “larger scheme to deceptively manufacture deep discounts in an effort to incentivize consumers to make purchases.” The lawsuit additionally claims the defendant implies a sense of urgency by displaying a countdown on its homepage “to signal the fast-approaching end of the sale.” When the countdown expires, however, it continues to display “ends in 0s,” the suit says.

According to the complaint, the “only plausible explanation” for Udemy’s practice is to generate sales, artificially inflate the perceived value of its products and thereby charge consumers more than they would otherwise be willing to pay.

The lawsuit looks to represent anyone in the U.S. who, within the past four years, purchased from Udemy’s e-commerce website one or more products at discounts from an advertised reference price and have not received a refund or credit for such.

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