Coles’s “Down Down” promotion is one of Australia’s best known campaigns. But the supermarket has been caught red-handed after a federal court judge found Coles misled shoppers by promoting fake discounts .

Through its proceedings, Australia’s competition regulator has given consumers an intriguing look-behind-the-curtain moment, exposing how a major supermarket sways shoppers to buy its products.

Here’s how the case unfolded.

Faulty ‘guardrails’

In a ruling delivered on Thursday morning accompanied by a 523-paragraph judgment, justice Michael O’Bryan explained how Coles tripped itself up when trying to ramp up its well-known campaign.

The Down Down promotion, known for its catchy jingle and large red hand, relies on a practice called “was/is” comparative pricing that claims a product is cheaper than it used to be.

This promotional tactic has been scrutinised by the Australian Competition and Consumer Commission at Coles and other retailers.

The concern is that it is prone to abuse by creating…