The Federal Trade Commission is looking into Amazon’s pricing practices investigating allegations of “deceptive discounting.” The complaint was brought on by the Consumer Watchdog group who have looked at 1,000 products on Amazon’s site and found that 46% of them had list or reference pricing associated with them. The Federal Trade Commission is already reviewing Amazon’s bid to buy Whole Foods so they tacked this investigation onto the review. This investigation by the Federal Trade Commission isn’t a surprise to some. Many people have suspected Amazon of using reference pricing to make “deals” look far better than they actually are.
An analysis found that in 61 percent of products with reference prices, Amazon’s reference prices were higher than it had sold the same product in the previous 90 days, Consumer Watchdog said in a letter to the FTC dated July 6.
“The conclusions the Consumer Watchdog group reached are flat out wrong,” Amazon said. “We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”
The review of Amazon’s discount pricing is an indication the FTC is taking a serious look at the e-commerce company’s agreement to buy Whole Foods, a deal that critics say could give Amazon an unfair advantage.
It will be interesting what the FTC concludes from this investigation. I know many people who are careful about shopping Amazon suspecting the deals they find are less than stellar. I suspect that if Amazon is using “deceptive discounting” practices, they aren’t the first to do so. Automobile dealerships are often accused of using this method to lure customers in using internet and print ads. We’ll see what happens in this case.Source: Reuters