FTC reportedly looking into Amazon's price listing practices

FTC reportedly looking into Amazon's price listing practices

Reuters reports that as part of that review, the FTC is fielding a request from a consumer group to investigate whether or not the company has deceptive pricing practices online. 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.

Eleven members of Congress have asked the Department of Justice and the Federal Trade Commission to review Amazon's $13.7 billion purchase of Whole Foods for possible negative impacts on underserved communities.

The group looked at some 1,000 products on Amazon's website in June and found that Amazon put reference prices, or list prices, on about 46 percent of them.

So for example, one item in Consumer Watchdog's report was a drill that Amazon was selling for $183, claiming it was a 40% discount from the original price of $305.

Critics of Amazon's proposed purchase of Whole Foods, which is pending approval from regulators, are anxious that Amazon's alleged deceptive discounting practices might spill over.

Amazon in its statement said of the study said: "The conclusions the Consumer Watchdog group reached are flat out wrong". In other words, the group claims that Amazon inflated the reference price during a sale to make it appear as though the discount offered by the sale was greater than what it regularly sells for. The letter argues that retail locations have closed as Amazon has expanded, and if the company succeeds in taking up a substantial portion of the grocery market that could hit low income communities acutely. The FTC's investigation is part of its review of Amazon's agreement to buy Whole Foods for almost $14 billion.

In the meantime, Amazon has responded to the Consumer Watchdog allegations, calling their study of its pricing "deeply flawed". Thus, the deals looked like better bargains than they really were.

Amazon settled similar allegations with Canada's Competition Bureau in January.

Amazon ran afoul of the FTC in 2014 for making it too easy for children to run up bills while playing games such as "Pet Shop Story" and "Ice Age Village" on mobile devices, resulting in an estimated $86 million of unauthorized charges.

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