US Amazon investigation probes misleading price discounts
Allegations that Amazon is misleading consumers over pricing are to form part of the US Federal Trade Commission’s review of the retailer’s $13.7bn proposed takeover of premium grocer Whole Foods, it has been reported.
US Amazon investigation probes misleading price discounts
According to Reuters sources close to the investigation are to broaden the scope of this probe to encompass allegations by Consumer Watchdog, a pressure group, which tracked the pricing of 1,000 items throughout June.
This found that Amazon was using reference prices, the highest figure an item will generally sell for, on 46% of items, a figure which was higher than the product had sold for over the previous 90 days in 61% of cases.
It is argued that this has the effect of making the reference prices appear to be a bargain to unwary shoppers but Amazon has strongly refuted these findings, stating: “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.”
FTC guidelines ban the use of ‘inflated’ reference prices with the intent of misleading consumers into believing they have nabbed a bargain.
Amazon is presently engaged in a bitter tussle with WalMart after the bricks and mortar giant urged its suppliers to stop using its cloud services.