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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."
So brick and mortar stores do this ALL THE TIME.... they never cared. But Amazon does it. BAM!
This is also illegal in Canada and stores get fined for it as well up here. Maybe you're in the US, where consumer protections end where corporate rights start. Doesn't work that way up here though. It's the same reason why when you buy something on Steam in Canada, it's considered an owned product not a license.
Om, nomnomnom...
"I want this and am willing to pay the amount for it." == Actual Product Value
(Varies greatly depending on buyer's circumstance, and need.)
Canada's Competition Act makes it illegal to display an "ordinary price" (i.e. undiscounted) that is not representative of the actual price you'd be paying most of the time. Basically, if that price is only shown for a short time (the product is on sale almost all the time at a different price) or that very very few sales happen at that price (because it's way too high), then it's not considered the ordinary price.
Many many companies were guilty of that sort of stuff, so the regulation helps dealing with that. I know that as an American, you're not really used to consumer protection, but Canadian laws tend to favor the consumer a lot more.
They could just read the relevant sections of the Competition Act. The criteria used to determine an ordinary price are clearly stated there.
Amazon.com prices in the USA are the lowest or close to it. Amazon.ca is nowhere close, and are often completely fantastical.
Amazon.ca and Amazon.com are not very alike.
In Canada, we have laws regarding what you can post as a 'regular' price, in that it must be related to a retailer's actual sales history. The 'regular' price cannot be fabricated from whole cloth. This is distinct from declaring a price to be 'recommended retail price' or MSRP.
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.
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.