The Federal Trade Commission is investigating allegations that the e-commerce giant is using “deceptive discounting” measures in online sales, according to a report from Reuters news service.
The Federal Trade Commission (FTC) is looking into allegations that Amazon “misleads customers about its pricing discounts,” according a report from Reuters news service.
The allegations were brought forward by advocacy group Consumer Watchdog, which looked at over 1,000 products on Amazon’s website in June and found that Amazon put references prices, or list prices, on 46 percent of them. According to its findings, 61 percent of the reference prices were higher than what the product had sold for originally in the past 90 days, Consumer Watchdog wrote in a letter to FTC.
According to Reuters, Amazon said the Consumer Watchdog’s findings were “completely flawed.”
“The conclusions the Consumer Watchdog group reached are flat out wrong,” Amazon said. “We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”
FTC initially began a review of Amazon due to its agreement to buy Whole Foods and the additional probe into pricing is part of the FTC’s role in ensuring companies comply with antitrust laws. Critics like Consumer Watchdog have argued that the “deceptive list prices” make Amazon prices “look like a bargain,” and have therefore asked the FTC to stop Amazon from buying Whole Foods, said Reuters.
While FTC’s “Guide Against Deceptive Pricing” warns against using a “fictitious” or “inflated” list price for the purpose of making the price charged look like a bargain, no official probe has been announced as of yet.
FTC probes Amazon pricing practices
