FTC Probing Whether Amazon Uses Misleading Discounts

It’s not just old-school retailers like J.C. Penney and Macy’s getting rapped—and in some cases sued—for allegedly misleading discounts. Now Amazon has come under fire for the very same issue.

The Federal Trade Commission is looking into whether Amazon’s advertised discounts are “inflated and fictitious,” according to a report in Reuters, citing unnamed sources.

The FTC has not yet decided whether to commence a full-blown investigation, the news agency said.

The commission was apparently responding to a report from Consumer Watchdog, an advocacy group, which said that many of Amazon’s so-called “previous” prices are “inflated and fictitious…to give consumers the misleading impression they’re getting  a bargain.”

The group said that Amazon has switched from “reference prices” to “previous prices,” or “historical reference prices”—but that this was just as misleading.

“Amazon’s historical references prices were at least as deceptive as the list prices they replaced—and by some measures, more so,” it said.

The survey charges that Amazon regularly inflates its reference prices, in some cases by as much as 70 percent.

“The findings suggest that Amazon continues to flout Federal Trade Commission regulations on deceptive pricing, as well as laws in California and other U.S. states where it does business,” the group concluded.

Amazon responded the survey was “flat out wrong,” and said it regularly checks its previous prices with manufacturers.

JCK News Director

  • MisterChris

    Anyone dumb enough to believe anybody when it comes to “List” price should have their computer privileges revoked. The only comparison that matters is Amazon’s price against the competition. WHO CARES what the price “used” to be?

  • Lapidary Artist

    When a monopoly increases prices for no justifiable reason, the only thing competitors can do is increase price in a similar fashion. In the oil industry that’s called collusion and price fixing. Thankfully there are ‘watch dog’ groups out there on the consumers side.

  • Deep

    Amazon prices on some items are changing almost every day, so it’s very difficult to judge what kind of “discount” you’re getting. As mentioned below, the comparison should be against the competition.