Some deals are too good to be true. And, for Amazon, they will cost the company.
Amazon just got slapped with a $1 million fine for misleading pricing
List prices, shmist prices.
Asa Mathat
Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.
A Canadian enforcement agency announced today that Amazon Canada will pay a $1 million fine for what could be construed as misleading pricing practices.
The investigation centered on the practice of Amazon displaying its prices compared to higher “list prices” — suggested manufacturer prices (MSRPs) designed as marketing gimmicks to make people think they are getting a deal, even though it’s often the case that no shopper ever pays that price.
“The Bureau’s investigation concluded that these claims created the impression that prices for items offered on www.amazon.ca were lower than prevailing market prices,” Canada’s Competition Bureau said in a statement. “The Bureau determined that Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate.”
An Amazon spokesman declined to comment.
As chronicled by the New York Times, Amazon began removing these so-called list prices on many items in the U.S. last year. The Competition Bureau also said the company has made changes on its Canadian site “to accurately represent the savings available to consumers.”
The Competition Bureau’s investigation ran from May 2014 to May 2016. Amazon Canada will pay an additional $100,000 to cover the costs of the investigation.
This article originally appeared on Recode.net.
