The Federal Trade Commission is investigating whether Amazon deceives its customers about pricing, according to a Reuters report published Thursday.
The Federal Trade Commission (FTC) is investigating whether Amazon deceives its customers about pricing, according to a Reuters report published Thursday.
The FTC’s probe is part of a larger review into Amazon’s recent decision to purchase Whole Foods, and stems from a consumer group’s own probe.
Consumer Watchdog conducted an analysis and reportedly found that 61 percent of offered items with reference prices — the purported cost of a product compared to a previously advertised price — were higher than a price for the same product in the prior three months. The group sent its study in a letter to the FTC earlier in July, according to Reuters. (RELATED: Amazon Looking To Block In-Store Customers From Checking Prices On Their Phones)
Amazon, though, argues that their research is extremely inaccurate.
“The study issued by Consumer Watchdog is deeply flawed, based on incomplete data and improper assumptions, ” an Amazon spokeswoman told The Daily Caller News Foundation. “The conclusions the Consumer Watchdog group reached 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.”
Nevertheless, the FTC’s review seems to show it is somewhat diligently looking into all aspects of the tech conglomerate’s deal with the grocery powerhouse, Whole Foods. (RELATED: Amazon Wants To Open 2,000 Grocery Stores In The Next Decade)
Herbert Hovenkamp, an antitrust law professor, though, doesn’ t think the FTC will forbid the acquisition even if Consumer Watchdog’s accusations prove true.
“Normally, we don’ t think about deceptive pricing as a sign of market power and indeed if you look at the people who do it, they’ re not monopolists, ” Hovenkamp told Yahoo Finance. “These are the aluminum-siding sales people and used-car dealers and small firms that operate in particular markets where they can take advantage of vulnerable people.”
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