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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."
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!
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...
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.
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.