FTC Reportedly Looking Into Potentially Deceptive Amazon Discount Pricing

The FTC has specific guidelines in place that warn against using a "fictitious" list price for the goal of making a sale look like a better bargain than it actually is.

The Federal Trade Commission (FTC) is investigating whether Amazon deceives its customers about pricing, according to a Reuters report published Thursday.

Consumer Watchdog's analysis of 1,000 products on Amazon found that 61 percent of the products were listed at prices that were higher than Amazon had ever actually sold them - essentially making it seem like customers were getting a great deal when there was actually no deal.

So for example, one item in Consumer Watchdog's report was a drill that Amazon was selling for $183, claiming it was a 40% discount from the original price of $305. The informal probe is tied to Amazon's plans to purchase Whole Foods and become an even more dominant online retailer.

When asked for a comment, Amazon said, "The conclusions the Consumer Watchdog group reached are flat out wrong". "We validate the reference prices provided by manufacturers, vendors, and sellers against actual prices recently found across Amazon and other retailers". 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.

Umbrella-sharing company loses most of its 300000 umbrellas
E Umbrella launched with an investment of 10 million yuan (approximately $1.47 million) when it launched in April. But he may have overestimated people's honesty - or even their ability to simply do not forget to give them back.

The FTC is looking into the allegations as part of its ongoing review of Amazon's deal to acquire Whole Foods.

Additionally, past year Propublica, a nonprofit dedicated to investigative journalism, looked at 250 frequently purchased products over several weeks and found that around 75% of the time Amazon's own products and those of companies that buy Amazon's services were placed in its website's coveted "buy box".

Consumer Watchdog released a report in May with very similar findings.

Amazon said the Consumer Watchdog's study was "deeply flawed".

Along with Amazon's pricing practices, allegations of anti-competitive tactics have followed the e-commerce giant around the economy as it tries to win market share and expand into more markets. Amazon said in June that it would buy the premium grocer for $13.7 billion.

  • Darren Santiago