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."

Comments

They have plenty of company

[rmdingler]

Amazon is not alone in this practice. (beware the autoplayer)

As long as people value the ephemeral bargain of the markdown, instead of the actual product value, this retail trick will never die.

Re:They have plenty of company

[Mr D from 63]

No doubt. They should go ahead and fine just about every retailer. This is something that consumers figured out a long time ago, Canada is just a little late.

Accuracy

[SeattleLawGuy]

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.