FTC said to be reviewing Amazon's "deceptive" pricing

by Edgar Hayes July 24, 2017, 0:08
FTC said to be reviewing Amazon's

The Federal Trade Commission (FTC) is investigating whether Amazon deceives its customers about pricing, according to a Reuters report published Thursday.

A group of Democrats in Congress sent a letter this week urging the U.S. Department of Justice and the Federal Trade Commission to conduct an in-depth review of Amazon.com Inc.'s (NASDAQ:AMZN) $13.7 billion deal to purchase Whole Foods Market Inc. It filed the complaint after looking at some as many as products on Amazon's website and finding that the online retailer put reference prices or list prices on 46 per cent of them. The spokesperson added that they validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.

Still, the mere fact that the FTC is looking into the consumer watchdog pricing allegations is evidence that regulators are carefully inspecting Amazon's planned takeover of Whole Foods. The advocacy group asked the FTC to stop Amazon from buying Whole Foods while the deceptive discounting is occurring. That report looked at listings for 4,000 products and found that in almost 40% of cases, the prices displayed were using reference prices out of whack with everyone else.

Amazon then released a statement saying that Consumer Watchdog's study was "deeply flawed".

A spokesperson for Amazon told the publication that the conclusions reached by the Consumer Watchdog group are flat out wrong.

The nonprofit also found 38 percent of all reference prices were higher than any price charged by the online retailer in observed history. Reference prices on sale items "exceeded the maximum price observed within the preceding 90 days an astonishing 97 percent of the time", the nonprofit said.

"Amazon appears to be increasing its use of reference prices on its site since past year, when it quietly eliminated many list prices", the report said. "These are the aluminum-siding sales people and used-car dealers and small firms that operate in particular markets where they can take advantage of vulnerable people".

In a response, Brian Huseman, Amazon's vice president of policy, said Amazon and Whole Foods hope to expand access to fresh food.

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