Amazon Canada has been fined $1 million by the Competition Bureau, as part of a settlement regarding the online retail giant’s pricing practices in this country.
According to the Bureau, Amazon “often compared its prices to a regular price—or “list price”—signaling attractive savings for consumers,” but after an investigation, the conclusion was Amazon had “relied on its suppliers to provide list prices without verifying that those prices were accurate.”
Essentially, the savings advertised online, plus in the company’s mobile app and emails to customers were not entirely true, based on this list price discrepancy, which exaggerated savings.
John Pecman, Commissioner of Competition, said in a press release:
“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. 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 made changes already to fix how list prices are stated along with savings claims, both on their Canadian and American websites. The penalty of $1 million will be paid by Amazon, plus an additional $100,000 to the Competition Bureau to cover the latter’s costs.
The investigation into Amazon.ca’s pricing practices took place between May 27, 2014 and May 6, 2016.