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Amazon Just Got Slapped With a $1 Million Fine For Misleading Pricing (recode.net)
Some deals are too good to be true. And, for Amazon, they will cost the company. From a report on Recode: A Canadian enforcement agency announced today that Amazon Canada will pay a $1 million fine for what could be construed as misleading pricing practices. The investigation centered on the practice of Amazon displaying its prices compared to higher "list prices" -- suggested manufacturer prices (MSRPs) designed as marketing gimmicks to make people think they are getting a deal, even though it's often the case that no shopper ever pays that price. "The Bureau's investigation concluded that these claims created the impression that prices for items offered on www.amazon.ca were lower than prevailing market prices," Canada's Competition Bureau said in a statement. "The Bureau determined that Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate."
As long as people value the ephemeral bargain of the markdown, instead of the actual product value, this retail trick will never die.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
as they made $1,000,001, it was worth it.
Fines mean nothing if the fine isn't more than the company made from breaking the rules.
"No worries mate, 99.99% for us, 0.01% for you. Lesson learned." a spokesman was heard to say by an anonymous third party.
Requiem for the American Dream
Canada's Competition Bureau said in a statement. "The Bureau determined that Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate."
If that's the price the suppliers are giving them, why wouldn't it be accurate? Nobody forces people to buy from Amazon, there's an entire world wide web out there where they can compare prices and make their own determinations. Heck, there are even sites that will do the comparisons for you. Likewise, nobody ever pays MSRP on anything anyway; this sounds like a bogus complaint to me.
Taking guns away from the 99% gives the 1% 100% of the power.
Canada is a notoriously uncompetitive market. Gouging is the norm here.
Take the U.S. Target retailer for example. They are a chain well known to Canadian border shoppers. They finally came in under the assumption that they could profit simply by having a Canadian presence, even though they offered inferior content at a premium over what Canadians could get across the border (even after currency and duties are considered).
They failed miserably, and pulled out after big losses, but it speaks to the general mindset of the Canadian retail market.
I'm all for protecting the consumer, but this sounds like that Canadian agency had a $1m budget deficit and they wanted to cover it fast. Sure, MSRPs are stupid and it would be nice to get rid of them, but how is the retailer supposed to know the manufacturer/supplier has them "inflated". Are they supposed to go all-Sherlock for each item they sell?
Violence is the last refuge of the incompetent. Polar Scope Align for iOS
Uh...you broke Law 365, section A, code D! Now we get a million dollars! Muahahahah
Laugh all you want, but there is a bit of validity to the complaint.
If you compare Amazon.com (US) to Amazon.ca (Canada) you will see that Amazon.com is like a superstore, with tons of choices and multiple price points for new, used, refurb, etc., and Amazon.ca is like your corner convenience store, you're lucky if you have one choice and it may or may not be marked up higher than retail. Yes, consumers should comparison shop but it could be confusing for less experience online shoppers.
So brick and mortar stores do this ALL THE TIME.... they never cared. But Amazon does it. BAM!
I've spent a lot of time in retail and - news flash - everybody does that. When Kroger has a "plus card" deal they always show you the "savings" vs. the MSRP, even if that's not what the item was priced at before the sale. Publix does that with their 2-for-1 deals - you get two items as the MSRP of one. You will save good money doing that, but it's not exactly half price.
This is normal. Once again, Canada shows why government must, of necessity, be reined in.
Do you have ESP?
Let the 3rd annual protectionist games begin, and may the odds be ever in your favour.
The consumers have already fined themselves for being misled by such a trivial thing.
Identifying a WASP is easy: a person who steps out of the shower so as to pee in the toilet.
Car dealership sucker price yes some (dumb) people do pay that.
I
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
"It's all pipes, what's the difference!!!" - George Costanza
Before the TechDirt revealed "intelligent massless robotic agents" is the new monicker for software, the market valuation of Amazon went up by 20% and the top management was able unload more of their stock options just in time.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Every single sale item at a grocery store lists MSRP for comparison.
I wonder how many millions in profit the made off the deceptive pricing?
This is a pretty common requirement in the western world. The US is the only western country I'm aware of in which there's not a law against advertising an item as on sale when it's never actually been sold at a higher price.
In the UK (and most of Europe) for example, all price cuts must be advertised as being cut from a different price that you have sold the item at for a continuous 30 day period.
If that's the price the suppliers are giving them, why wouldn't it be accurate? Nobody forces people to buy from Amazon, there's an entire world wide web out there where they can compare prices and make their own determinations. Heck, there are even sites that will do the comparisons for you. Likewise, nobody ever pays MSRP on anything anyway; this sounds like a bogus complaint to me.
You are wrong. People rely on this information, which is why it is useful to do it. Amazon could and should easily show what the model normally sells for, but they only have an incentive to do it if forced to by regulation. Like how supermarkets should show price per unit even though anyone can do math if they take the time. In real life, you occasionally need regulation in order to incentivize behavior which is useful for society even though it hurts the person who does it. Otherwise you have lots of fraud, contracts are unenforceable, the economy becomes a whole lot less efficient, etc...
A lot of government regulations are implemented badly, and some are bad ideas, and there are too many--but there are really good reasons for some government actions.
Real lawyers write in C++
It seems that the original manufacturers are lying, so why is Amazon held to be at fault here?
Comment removed based on user account deletion
We are fining a company because we are protecting people so fucking stupid that they think and MSRP means something real.
The problem with the world is that we keep insulating these people from their retarded decisions. Nothing good will come of dumbing the world down to the capability of the lowest common denominator.
There are zero people in the world that we want to breed who were fooled by this. Zero!
Why is it so hard to only have politicians for a few years, then have them go away?
Yes, that's exactly how Canadian law works. The Manufacturer can suggest a price, but you will be fined millions of dollars for telling the customer what that price is. Granted, MSRP is generally a marketing gimmick, but it's very much a suppression of speech that would have pitchforks coming out here.
Identifying creeps is also easy: a person who is looking into your window while you're showering.
You mean that $10,000.00 LAN audio cable which is discounted to $5995.00 (and produces audio better than being there in person) is marketing hype?
Yes that's the reason why 30 days before the sales period, new, overpriced products appear. Often they have a single one of each item and they stick it in the least visible area of the store.
They are only here to be "discounted" later. In fact, they don't want you to buy it full price because it would not be available to others and it would break the 30 days mandatory period. Shops don't advertise this but it is not really a secret either. If you ask a seller and if he is not too retarded, he will tell you the whole story.
If that's the price the suppliers are giving them, why wouldn't it be accurate?
Because it is nothing more than a suggestion from the supplier. It has no actual relationship to real market value.
Nobody forces people to buy from Amazon, there's an entire world wide web out there where they can compare prices and make their own determinations.
So according to you fraud is ok because nobody *has* to buy from Amazon? Weird argument you have there. Sorry but retailers shouldn't get to make any and all claims about their product regardless of veracity. This includes lying about the "market" value of the product to make it seem like it is a better deal than it actually is.
"The US is the only western country I'm aware of in which there's not a law against advertising an item as on sale when it's never actually been sold at a higher price."
That's called deceptive pricing and we most certainly do have laws and court cases dealing with exactly this in the USA, courtesy of the FTC.
Still waiting on Serviscope_minor to wake up to fucking reality and realize that Jessica Price isn't going to fuck him.
This is a pretty common requirement in the western world. The US is the only western country I'm aware of in which there's not a law against advertising an item as on sale when it's never actually been sold at a higher price.
My personal favorite are the stores always running the 50% off sale. 50% off the MSRP which is what the store would actually sell the price at regularly. That's the United States for you. If we're the world leaders of anything, it's unethical sales and marketing.
We'll make great pets
I have never even seen jewelers sell their wares for less than 50% off anywhere in Canada... They always say it's a sale, but in fact, the sale price *is* their everyday price.
File under 'M' for 'Manic ranting'
The other common thing they do is alternate two sales -
Oranges, £0.49 –SALE, 3 for 2!
Oranges, SALE £0.33 was £0.49
Each for 30 days.
>> In the UK (and most of Europe) for example, all price cuts must be advertised as being cut from a different price that you have sold the item at for a continuous 30 day period.
In parts of the US, this is illegal. For example, there's a California law on this:
http://money.cnn.com/2016/12/09/pf/price-scheme-jcpenney-kohls-sears-macys/
Which is exactly why Free Markets will never exist. You can never have the information you need.
putting the 'B' in LGBTQ+
It really is a war of information. If consumers ALL had the information they needed to compare pricing, or to decide which foods will kill them, you'd have a very different image of a "free market".
The way that a lot of stores get away with this behavior is that there are two models made for an identical product. This is most common in mattress sales. Model A is exactly like Model B in every possible way. Literally the only difference is the model number. Model A starts out at MSRP of normal price of X dollars. Most stores have an online presence so while the item is at top price it is only offered online. After 30/60 days Model A goes on sale for 1/2 X dollars. MASSIVE Sale!! Come in now!! Model B goes online for X dollars at regular price. After 30/60 days Model A/B switch prices/places and the 'sale' continues.
This is why mattresses are always 50-60% off.
A sporting goods chain, Forzani's, was hit by a $1.7 million fine. In there also it mentions a clothing chain, Suzy Shier, being fined $1 million.
http://infofranpro.wikidot.com...
Sears was recently fined over tires.
http://www.autoserviceworld.co...
Here's one more from Micheal's, an arts and crafts store, for $3.5 million!
http://www.huffingtonpost.ca/2...
Sears has previously been fined over pricing on other products but I can't find a source. In fact, many retailers seem to have issues related to advertised and actual pricing, and the Competition Bureau, rightfully, takes them to task for it.
Retailers in Canada, Amazon among them, should know better. The history and fines have been set.
"You have to get up pretty early in the morning, to catch me peeking in your bedroom window!"
– Emo Philips
A Free Market doesn't require that all information be known; what it requires is that contracts between individuals be enforced as agreed by those individuals. You'll note that governments are incessantly meddling with such enforcement.
The UK has a lot of loopholes for this. For example, if you're a big chain, you don't have to have sold it at the full price in the store that offers a discount, so they'll often have one store each week selling something at the full price but all of the others selling it at the sale price. You can also go straight from an introductory discount to a sale price with basically no time in the middle when it's full price.
I am TheRaven on Soylent News
Identifying a WASP is easy: a person who steps out of the shower so as to pee in the toilet.
Sometimes you have to go to the bathroom while you are in the shower. Curse those home designers who didn't put the toilet in the bathroom. I hate having to push it down the plug hole with my toe.
In the free world the media isn't government run; the government is media run.
The market doesn't give a flying fig about the rules you put in front of it. The market will always respond freely. Constrain it too much and "alternative" markets show up. The alternative market isn't really alternative, it is just freedom expressing itself.
God: "I don't leave footprints!"
I buy a lot of crap from Harbor Freight and most of it is worth not just every penny, but more than I paid for it. Not all of it, mind you, but most of it. Especially as Sears implodes, if you go anywhere else for hand tools, you're nuts. But they have taken to employing this practice themselves, and comparing their prices to some wholly invented competitor price. Sometimes they are actually comparing their junk to Snap-On tools, and then claiming you're saving the difference between their sale price, and the price of a high quality product where you can get warranty replacements off a truck near you, without having to drive to HF. I wouldn't mind so much if they were comparing to some other cheaply made tools, but they're comparing to the best. That's a load of hot cockery.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
My mum bought 4 beigels for 25p each, and the girl tried to charge her £1.40. My mum (who used to be a programmer, and can probably add octal in her head faster than a bakery worker could count bread rolls) said "No. 4 times 25p is £1." The girl responded by bringing out a piece of paper and a biro and wrote on in 25p + 25p + 25p + 25p = £1.40 and then said "see figures can't lie!" My mum said "Ok, just give me one beigel" and handed over 25p. Then she said "OK, give me another one" another 25p handed over. Process repeated until my mum had 4 beigels and the girl had £1. - problem solved (and queue of potential customers dispersed).
If you are not good with mental arithmetic, don't ever buy more than one item in East London. And make sure the items scanned in the supermarket are the items that you actually take home with you. It is a regular event to buy two of something and find the till receipt mysteriously shows three of them. (and the shop WILL blame the Mysterons for it).
Tell the above to your kids and explain "that is why you have to study maths at school".
And tell the appropriate idiot at /. that £ is the symbol for GBP and not $AU or WTF.
Sent from my ASR33 using ASCII
But in this case, the consumer has all the pricing information right at their fingertips. You can track almost any product's price history with CamelCamelCamel. Too much work to click a button? Use Wikibuy instead, which will pester you with a pop-up whenever you browse an item with a lower price elsewhere. In 2017, do I really need to mention PriceGrabber or NexTag? Hell, even Google links you to their own price comparison service nearly every time you search.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Yeah I've worked retail in the past and actually have put higher prices on products that were "on sale" with new higher prices that were never charged.
It's dirty. Thankfully I saw that when I was a lot younger so I made sure to value products through research on what they do and their value to me than what a store tells me.
A free market that actually delivers on the promises of a free market DOES require perfect information. Otherwise it devolves into a race to the bottom where all you can buy is crap.
The US is the only western country I'm aware of in which there's not a law against advertising an item as on sale when it's never actually been sold at a higher price.
That's not quite true. There have been quite a few companies who got in trouble for misrepresenting "regular" pricing in advertisements or other displays. It's just that in the US we don't have an individual law which specifically codifies it, or uses an arbitrary time period like in your example. Instead it's included under other laws related to misleading/false advertising in general.
One example is that a few years back, Wal-Mart had a TV ad campaign about their "prices are rolling back" which featured various item smacking a price display, and the old numbers falling off to reveal the new, "low" Wal-Mart price. The problem was, if you paid attention the "original" price shown in these ads they were completely unrealistic. For example an item like a shirt showed a price in the millions of dollars before hand, and even though it was literally only shown for a split second they got in trouble with the government and had to pay a bunch of fines.
More recently, several large brands including Kohl's got in trouble because they had coupons or advertisements which claimed (for example) that you could buy a particular item which is normally sold at $25 for $20. But the actual regular price was $20, so they got in trouble for calling it a "sale" when that was their regular price, despite what the MSRP stated.
The problem with setting an arbitrary 30 day leading period is that the retailers just jack the prices up a month ahead of their 'sale' promotion. With the US system, companies can get in trouble with raising the price in advance of "lowering" it for a "sale", but in Canada the law is written so that as long as you went a full 30 days at the stupid price you can't get into trouble.
That doesn't follow.
Which is exactly why Free Markets will never exist. You can never have the information you need.
Economic information theory teaches that information has a value and a cost. You can have the information you need, but it costs something. In this case it would cost time to compare.
This is funny sitting next to the anti-American snobbery. We may not have many restrictions on "sales," but we do have lots of consumer protections, and they're followed because customers will get red-faced angry if they aren't, and also the government is obligated to investigate consumer complaints involving false items or untrue prices.
Once difference compared to the Canadian situation in the article is that consumers in the US do not consider a "list price" to have any meaning other than "this is a price that the person telling you about it put on a list." Americans assume that they game that, and that if you try to control it they just find other ways to manipulate it; like the UK where stores will have a section of overpriced stuff on the least convenient shelf for a fixed period of time before it goes on sale.
Here we don't worry about a "list" price, we worry about what another outlets sell it at. It is the part that is actually true. And stores who target lower income customers often buy 12 month sign kits and have rotating "sales" with the same prices all year.
How would it not? The whole premise of the free market is based on the buyer being able to determine tha value proposition of the offer. You can't do that when durability isn't apparent. For a while, brand made a decent(ish) proxy for that, but now most brands are just a shell around the no-name chassis used by multiple brands.
For example, 2 widgets priced at $30 and $35. The $30 one is made of substandard parts and will fail in a year. If the $35 one is made with quality parts, it will last 5-10 years. Simple choice. However, in the real world there's also the $40 one which is the same chassis as the $30 one but with a 'better' branding on the shell. There's also the $50 one that used to be made with high end components and would last a lifetime, but last year it switched to mid-grade parts and will last about 4 years.
If you don't have perfect information, you can only choose based on price so when it turns out to be crap, you lose as little as possible. So the $30 crappy one it is. No point in selling one that will last a lifetime at twice the price, nobody will believe it, so make one with the crappiest components known to man and sell at $25 if you actually want to stay in business. Every once in a while, use better components is a run so you can spread some dis-information around.
Likewise, competitive pricing for the same product only works when you know what other people are charging for the product.
This seems like a case of a liberal government wanting to be the sole controller of taking and sharing of profits via taxation.
Huh? I'm pretty sure I see MSRP prices on both German and UK amazon:
https://www.amazon.co.uk/Sony-...
Wait, what? This has been standard practise in every retail industry for decades. Why is Amazon getting dumped with this fine? It's certainly a deceptive practise and needs to come to an end, but how can they single out one seller when their competitors have been doing it for so long? This is just absurd. They should have passed a new law outlawing the practise first. I would love to see something like it in the States as well. You can't just spontaneously decide that something is illegal that so many people have been doing for so many years.
While they're at it, can they make selling things for x.99 and such illegal, too? This frustrates me to no end, and is very clearly a deceptive marketing practise.
What part of the word "free" do you not understand? Free means unrestricted. Free does not mean omniscient.
On a more practical basis, most people are more interested in whether it's legal to buy a large Coke (for example. in NYC) than whether it costs more at 7-11 than at Costco.
Arrant nonsense. I can choose by convenience, color, date of manufacture, whether the seller is pretty or my friend, by whim, or any of dozens of other criteria.
Contribute to civilization: ari.aynrand.org/donate
What part of WORK do you not understand? A market can be regulated and healthy or it can be free and fail to live up to claims. It can also be poorly regulated and fail to live up to claims, of course.
So in order to get real pricing information you need to submit to being data mined. It's too difficult to ask companies to be honest about their prices? How long until those services start adjusting their prices based on kickbacks from the companies? Then we'll need new companies to track those companies. And so on. And before you claim that'll never happen, a few decades ago people would swear companies would never lie about their prices and today it's difficult to find companies which don't lie.
Personally I don't see the big deal here. I haven't yet met a single person that thinks the greyed out price on Amazon is anywhere near accurate. Mind you I'm not exactly an Amazon fan, but I've never met anybody that takes MSRP seriously unless it's for a very high demand, low supply item.
You're quite wrong. Free market just means that prices are governed by the forces of supply and demand, as opposed to being set by an actual government entity (for example, gas price ceilings during the 70s were not free market.) That's all there is to it really.
Other matters, such as making sure that you get what you were promised, don't directly play into that. Other government regulations can set rules against say, counterfeiting, mislabeling, torts, etc, without forcibly altering the selling price of an item. They may indirectly play a role in selling price, for example if you trust one brand over another, you're more likely to pay more for that brand. But again, unless some third party is telling you how much you must pay for it, then it's a free market.
The alternative to free markets are things like command economies, socialism, and price floors/ceilings. And non-free markets very rarely don't fail. For an example of why, see the price ceilings on gas prices during the 70s. Nobody wanted to sell at the prices that the government set, so there was very little supply, which meant long lines at the pump.
Venezuela is having a similar problem on a massive scale. It's hard as hell to import nice things there because the government has official prices that nobody wants to sell them at.
You still have no idea what products are actually "worth", and manufacturers want to keep it this way as much as possible. The less you know about the value of an item, the better.
I am very well aware of the definition of Free Market. Read what I said carefully. Markets only work to the degree that the buyer has perfect information. Regulation can improve the situation by banning fraud and false advertising. It can further ban various attempts at information control (for example, by voiding contract clauses banning reviews). All of those things improve the quality of information the consumer has.
Most people call that a regulated market. You can call it what you want, but you will not clearly communicate your point that way.
No, the alternative to a free market is a well regulated market. That does not imply price ceilings or floors. It may involve efforts to increase supply and almost certainly forbids collusion to artificially depress supply.
It's not about list prices, it's about actually selling the product at price $XX.
In Canada you have to offer and sell the product at some price that will form the basis of a regular price. It has nothing to do with MSRP, which is a legal construct, not an actual price.
If you have product A that you price at $19.99 you have to show you actually sold inventory at $19.99 and that you offered the product for sale and actually made sales for the majority of the time (eg more than 183 days a year, for example) the product was available. You could then offer the product for (say) $17.95 and call it a Sale or discounted price.
SEARS Canada (a somewhat different company than SEARS-Roebuck) was famously fined because they had too many sales, almost continuously, on certain products so that it was deemed that the Sale prices were effectively the actual regular prices. It's a False Advertising issue, not an MSRP issue.
That'd be like if I were fined 1 cent.
That's some thick pee you got there, buddy!
Great minds think alike; fools seldom differ.
No free does not mean unrestricted. It means something much more complex than that. Unfortunately the word "Free" is a bit of a misnomer and overloaded in English.
putting the 'B' in LGBTQ+
Ummm... no. For Example the NY stock market has at least 3 layers of regulation; the market rules themselves, the regulations, and the Federal government; and is touted as an example of a good approximation of an free market.
putting the 'B' in LGBTQ+
No, if a Free Market is not regulated it becomes a Captured Market. See the unregulated markets of the 1800s and the development of monopolies.
putting the 'B' in LGBTQ+
For computer parts:
PCPartPicker.
PriceWatch
That's some thick pee you got there, buddy!
I don't think its pee; it has lumps.
In the free world the media isn't government run; the government is media run.
A product is worth whatever it fetches on the market. Unless your product is pretty niche, those websites are a pretty good indication of what a product is worth.
If you find a hunk of gold in the woods, it's not worth zero just because it didn't cost you anything. Similarly, if you spend 40 hours building some craft to post on Etsy and no one wants to pay more than $10 for it, that doesn't make it worth more than $10.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I don't know about Amazon specifically, but my wife is very susceptible to "sales" in general. She definitely looks at the "% Off" part of the sticker more than the price itself.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
So in order to get real pricing information you need to submit to being data mined.
No. See my links - you do not need to run a browser extension unless you like the convenience.
It's too difficult to ask companies to be honest about their prices?
Yes, that's a huge and naive ask.
How long until those services start adjusting their prices based on kickbacks from the companies?
It would stand out like a sore thumb since there is a lot of overlap between competing sites.
Then we'll need new companies to track those companies.
We already have that, in a way. Consumer Reports, for instance, evaluates and recommends some of these sites. They also have their own tool.
a few decades ago people would swear companies would never lie about their prices
I'm 41, so maybe you are going back further than that? Marketing and sales have always been sleazy.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
A free market doesn't mean there can't be any regulation. If there was no regulation, then it would just be anarchy and people could just steal your shit instead of actually paying you for it. Again, a free market just refers to how prices are set, and so long as they're determined strictly by the forces of supply and demand, then it's a free market.
It's the old political shuffle. The people who want no regulations call that the Free Market. Then they point to obviously working markets and declare them to be "free", carefully ignoring the regulations that make it work.
Of course, given the madness over the last decade or so, I would say the financial markets could be working a lot better with more regulation.
Nevertheless, any Market requires adequate information available to the buyer. Look what happened with CDOs when that was polluted with disinformation from corrupt ratings.
Most market regulations revolve around preventing fraud and suppression of information.
Offer and be willing to sell. It is silly to claim that in Canada if you offer something for sale and nobody will buy at your first price, you can never offer it for sale at any other price. Unless somebody buys one, then you can change it. No, that is just an inaccurate representation of the rules. I can know that just because Canada has a functioning economy. If your business fails and you offer everything in your store at a discount and you call it a sale, that is actually allowed! Even if you have an item on one of the shelves that never sold.
What you claim is the rules is silly; you wouldn't have to prove both that you offered it for sale at a price, AND that you sold it for that price. If you sold it for that price we already know you offered it for that price. And the only reason to invoke offering it at that price is in case you didn't actually sell any, so you still have a metric. There are a bunch of details and caveats that make your pedanticism false. And, you ignored my points just to push an incorrect oversimplification.