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FTC Investigates Claims Amazon Uses ‘Deceptive List Prices’

Karl Utermohlen

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

The Federal Trade Commission (FTC) is looking into claims that Amazon.com, Inc. (NASDAQ:AMZN) is using deceptive list prices in its products.

FTC

Source: Amazon

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.

However, Consumer Watchdog did some further digging and discovered that about 61% of products with reference prices from the ones examined, Amazon’s reference prices were higher than they were in the same product in the same 90 days. The point of these list prices is to show a considerable discount when comparing them to the actual price.

The FTC is now looking into these allegations, according to a source close to the matter. It is unclear whether or not the agency will open a formal probe to examine Amazon’s retail practices.

The company refuted these allegations, saying Consumer Watchdog’s study had some considerable flaws and the conclusions they came to are “flat out wrong. We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”

The advocacy group is asking the FTC to block Amazon’s acquisition of Whole Foods Market, Inc. (NASDAQ:WFM).

AMZN stock fell 0.7% Friday.

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