The company is being accused by offering misleading discounts on its products, according to advocacy group Consumer Watchdog, which looked at about 1,000 products on Amazon's page in June, noticing that the e-commerce retailer includes a list price in about 46% of the products examined.
The Federal Trade Commission (FTC) is looking into claims that Amazon.com, Inc.
It is argued that this has the effect of making the reference prices appear to be a bargain to unwary shoppers but Amazon has strongly refuted these findings, stating: "The conclusions the Consumer Watchdog group reached are flat out wrong".
Consumer Watchdog conducted an analysis and reportedly found that 61 percent of offered items with reference prices - the purported cost of a product compared to a previously advertised price - were higher than a price for the same product in the prior three months.
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The FTC declined comment for this story. Amazon closed up slightly for the day at $1,028.70.
The group also asked the FTC to stop Amazon from buying Whole Foods.
In the meantime, Amazon has responded to the Consumer Watchdog allegations, calling their study of its pricing "deeply flawed".
Consumer Watchdog wants the FTC to halt Amazon's march toward acquiring Whole Foods until this online pricing issue is resolved.
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The FTC plays a dual role of probing charges of deceptive advertising and assessing mergers to ensure they comply with antitrust law. If that reference is made up, or the item never actually sells for that price, you can land yourself in some legal trouble.
If true it would be a particularly sneaky form of psychological trickery: tricking customers into thinking Amazon was offering them a great deal vs. regular prices, when in truth no deal existed.
Amazon settled similar allegations with Canada's Competition Bureau in January.
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