Antitrust watchdog investigates Amazon for allegedly lying about deal prices

Antitrust watchdog investigates Amazon for allegedly lying about deal prices

The Federal Trade Commission is looking into a complaint by the advocacy group Consumer Watchdog that Amazon.com AMZN misleads customers about its pricing discounts.

The FTC has previously settled cases with other tech companies, including Apple and Google.

Almost 40 percent of the 4,000 Amazon products the Consumer Watchdog looked at used references or list prices that were not charged by other retailers, according to the report's findings.

Amazon's pricing methods and advertising has received some pointed attention lately from outside observers, to the sometimes public consternation of Amazon, which has a deep interest in not only avoiding government lawsuits but also protecting its reputation as a low-price leader.

In response to these allegations, Amazon called Consumer Watchdog's study "deeply flawed". "The conclusions the Consumer Watchdog group reached are flat out wrong".

Another study from July, this one by Wikibuy, which has developed a price-comparison app, found that Amazon's prices for common school supplies were 15% more on average than they were on other sites.




"In other words, in almost four in 10 cases, Amazon never appeared to charge the previous price from which it claimed to be discounting", the group wrote in July".

The organization tracked 1,000 products sold on Amazon in June and found that Amazon put reference (list) prices on 46% of them. "They now employ several different kinds of reference price, including "was" prices, "sale" prices, or simply prices with a line through them ("strikethrough prices")". The letter argues that retail locations have closed as Amazon has expanded, and if the company succeeds in taking up a substantial portion of the grocery market that could hit low income communities acutely.

In one example, Amazon said the before-sale price on a pack of LED light bulbs was nearly $100, but offered the pack on sale for $14.99, showing that customers would receive an $85 savings.

Consumer Watchdog released a report in May with very similar findings. On average, the Amazon reference overstated the median market prices by $22, or about 20 percent.

Consumer Watchdog said it believes the Whole Foods acquisition should be blocked unless Amazon changes its pricing strategies.

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