Turns out Amazon.ca was not doing its due diligence.
And now the major online retailer has been slapped with a $1.1 million penalty.
Canada’s Competition Bureau resolved an agreement with Amazon regarding concerns with the retailers online pricing practices.
Amazon often compared its online pricing to regular price or “list price,” showing Canadians the potential for savings while using their website. But upon an investigation by the Bureau, it was concluded that the saving claims were false and misleading, according to a media release by the Competition Bureau.
The Bureau investigated pricing practices on Amazon.ca between May 27, 2014 to May 1, 2016. During that time they discovered that Amazon relied on the original suppliers to provide list prices without verifying that the prices were accurate.
— Competition Bureau (@CompBureau) January 12, 2017
After the investigation, an agreement was reached resolving the Bureau’s concerns, while sending other retailers a clear message that unsubstantiated savings claims will not be tolerated.
“Consumers are naturally attracted to claims that they will save money. We’re pleased that Amazon has put procedures in place to validate list prices received from its suppliers,” stated John Pecman, Commissioner of Competition in the press release. “This ensures that consumers are provided with accurate information and not misled by savings claims. This agreement was reached through collaborative efforts and reflects an innovative approach we call shared compliance.”
Amazon has already made changes to the way it advertises list prices on its Canadian website, and the policies put in place by Amazon have had an effect beyond the Canadian website, including on savings claims for products sold on www.amazon.com, according to the Bureau.
The retailer’s penalty and the changes in pricing practices are part of a consent agreement that is now registered with the Competition Tribunal and has the force of a court order.
Canadians consumers are protected under The Competition Act which ensures that consumers “are not misled by references to inflated regular prices. When comparisons are made between a regular price and a sale price, they must be true.”
It turns out that if it looks too good to be true, it probably is. Even on Amazon.