Amazon Under Pressure After Consumer Watchdog Investigation
Amazon has lashed out at the US’ Government’s Federal Trade Commission after it moved to investigate allegations that Amazon misleads customers about its pricing discounts.
The investigation, instigated in response to a recent Consumer Watchdog study, is part of the FTC’s broader review of Amazon ahead of its move to buy Whole Foods.
The original Consumer Watchdog report claimed that found that, in a survey of 1000 products, Amazon put reference prices on 46% of them.
However, they also found that for at least 61% of the products with reference prices, Amazon’s own reference prices were higher than it had sold the same product in the previous 90 days.
Consumer Watchdog argues that this misrepresents to customers how much of a discount Amazon is offering.
In response, Amazon have moved to publicly denounce the study, calling it “deeply flawed.”
“The conclusions the Consumer Watchdog group reached are flat out wrong,” Amazon said.
The company insisted that “we validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”
The FTC have declined to comment publicly as to whether or not the investigation will lead to a formal probe into the online retailer’s practices.
A move in either direction could have interesting ramifications for Amazon, especially as it moves to expand to the Australian market.
A ruling against them by the FTC over reference prices could set the stage for the company to be hit with similar investigations by the ACCC, should they fail to revise their practices.