FTC to Take a Gander at Amazon’s Discount Pricing Practices

Author: Richard Adhikari / Source: E-Commerce Times

The U.S. Federal Trade Commission is looking into Amazon’s discount pricing practices in response to a complaint filed by Consumer Watchdog over the company’s pending US$14 billion purchase of the Whole Foods grocery chain, Reuters reported last week.

“Asking informal questions about issues potentially related to a corporate acquisition is a natural part of the FTC review process,” observed Charles King, principal analyst at Pund-IT.

That said, it might be worth considering whether Consumer Watchdog’s allegations might be a shield for politically motivated actions by the FTC, he told the E-Commerce Times.

Although the Trump administration has yet to nominate three new FTC members, including the agency’s chairman, “given the rancor between the president and Amazon CEO Jeff Bezos, it’s worth considering,” King mused.

Consumer Watchdog’s Allegations

Consumer Watchdog earlier this year published a study that found widespread use of inflated list prices on Amazon’s U.S. website. However, Amazon rejected those findings, saying it had eliminated list prices when it believed they weren’t relevant its customers.

It introduced a “was” price to provide customers with an alternative list price when it didn’t display the list price, the company said.

Consumer Watchdog conducted a follow-up study last month, which examined 1,000 items advertised on Amazon.

It found the company had employed deceptive sales tactics — among them, displaying a struck-through price near the price it charged for a product, and indicating that the difference was the amount the consumer saved, although in many cases the product never had been listed at the struck-through price.

Amazon displays four types of reference prices: list, was, sale, and amount saved — indicated by the struck-through price.

Consumer Watchdog found…

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