Markets

FTC Said To Be Reviewing Amazon's 'Deceptive' Pricing

FTC Said To Be Reviewing Amazon's 'Deceptive' Pricing

The Federal Trade Commission is looking into claims made by a nonprofit that accuse Amazon of misleading customers about price bargains, a source close to the investigation told Reuters.

In response to Consumer Watchdog's study, Amazon reportedly told Reuters that the study was flawed and the conclusions reached by the advocacy group were flat out wrong. (NASDAQ:AMZN) is using deceptive list prices in its products.

"Amazon must not be allowed to expand these deceptive practices to a whole new pool of unsuspecting customers", wrote John M. Simpson, Consumer Watchdog Privacy Project director, in a letter to the FTC earlier this month.

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.

The review of Amazon's discount pricing indicates the FTC is taking a serious look at the e-commerce giant's agreement to buy Whole Foods, a deal that critics say could give Amazon an unfair advantage, Reuters reported.

Tigers trade Martinez to Arizona for three minor-league prospects
Noted for his quick bat and excellent hands, Lugo is showing more patience this season and making pitchers come to him. On initial inspection, the return for Martinez looks disappointingly light, and some experts around baseball agree.

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

When you visit the largest online retailer Amazon, you might expect that you are getting good prices and that the discounts they advertise are good deals.

Additionally, previous 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". "We validate the reference prices provided by manufacturers, vendors, and sellers against actual prices recently found across Amazon and other retailers". On average, the Amazon reference overstated the median market prices by $22, or about 20 percent. I suspect that if Amazon is using "deceptive discounting" practices, they aren't the first to do so.

This probe by the FTC is just the latest in a small string of legal woes faced by Amazon. Amazon said in June that it would buy the premium grocer for $13.7 billion.


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