Amazon settles price advertising case for more than $1 million

Amazon is being penalized for inaccurate pricing practices on its Canadian website.



According to the Competition Bureau, a Canadian independent law enforcement agency, Amazon will pay a $1 million penalty and $100,000 towards the Competition Bureau’s costs — punishment for violating the Competition Act, a law that ensures consumers are not misled by references to inflated regular prices.



The penalty and the changes in pricing practices are part of a consent agreement that is registered with the Competition Tribunal, a Canadian federal court that is focused on laws under the Competition Act.



The investigation, which related to pricing practices between May 27, 2014 to May 1, 2016, revealed that merchandise prices on the retailer’s website, mobile apps, online advertisements and emails featured regular or "list prices,” which were struck out with a line, and then featured Amazon’s significantly lower price. Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate, the firm said.



Amazon is already making good on its pricing strategies, and has “put procedures in place to validate list prices received from its suppliers,” said John Pecman, commissioner of competition.



“This ensures that consumers are provided with accurate information and not misled by savings claims,” he added. “This agreement was reached through collaborative efforts and reflects an innovative approach we call shared compliance."