FTC examines claims of Amazon using inflated list prices before signing off on Whole Foods...

Posted:
in General Discussion
In reviewing Amazon's proposed $13.7 billion takeover of Whole Foods, the U.S. Federal Trade Commission is reportedly exploring a complaint that the company posts false list prices on its website, making its discounts seem better than they really are.




An advocacy group, Consumer Watchdog, sent a letter to the FTC earlier this month, according to Reuters. The group noted than in an analysis of 1,000 products on Amazon in June, 46 percent of them included list prices -- and of those, 61 percent had prices higher than what Amazon had actually sold for in the past 90 days.

The FTC subsequently began an informal look into the claim, a Reuters source said. The agency has refused to comment publicly, but Amazon argued that Consumer Watchdog's data was "deeply flawed" and "flat out wrong."

"We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers," the company insisted.

Consumer Watchdog has suggested the FTC should block the Whole Foods deal until Amazon fixes deceptive practices. A formal probe, at least, is a possibility -- in January, the company paid a C$1 million ($756,659) fine to settle similar accusations with Canada's Competition Bureau.

While the costs of Apple's own products are well-established, it's possible that third-party accessories and peripherals -- some of which can cost hundreds or thousands of dollars -- might be among those with inflated list prices.
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Comments

  • Reply 1 of 23
    lkrupplkrupp Posts: 10,170member
    Amazon, use the “everybody does it” defense because, well, everybody does it in fact. When we shop at Kohl’s, for instance, the clerk is always telling us how much money we ‘saved’. It’s even printed on the receipt, “You saved $63.27 today.” Really? We did? When the ticketed price is never what you wind up paying anyway I find it hard to swallow that I saved money.
    Muntzdewmejony0
  • Reply 2 of 23
    I'm not sure I'm fully understanding the issue, but I initially don't see the problem. Is this referring to Amazon listing the MSRP of the product, then showing their price with the actual savings? If so, that's a pretty standard practice for many in person and online retailers.
    SpamSandwich
  • Reply 3 of 23
    gatorguygatorguy Posts: 23,469member
    lkrupp said:
    Amazon, use the “everybody does it” defense because, well, everybody does it in fact. When we shop at Kohl’s, for instance, the clerk is always telling us how much money we ‘saved’. It’s even printed on the receipt, “You saved $63.27 today.” Really? We did? When the ticketed price is never what you wind up paying anyway I find it hard to swallow that I saved money.
    Agreed. I think this informal consideration of a complaint from the consumer group will go nowhere. The SIG is just hoping to leverage the timing for the Whole Foods acquisition to put added pressure on Amazon to change their practices. 
  • Reply 4 of 23
    NotsofastNotsofast Posts: 450member
    Not so fast.  Amazon has made a major mistake by pushing so prominently into major brick and mortar move with Whole Foods.  It has awakened people to the less than ethical aspects of what they are doing to destroy competitors. I support free market capitalism as it is designed to produce greatest benefit, but at some point, there is going to need to be a need for reexamination of anti-trust law where you have group of venture capitalists fund a company to run at a loss for many years as it gobbles up and destroys competition. When profit/loss is no longer important there is something wrong. 

    As for the controversial "discount" Amazon advertises, in many cases it is downright absurd, e.g., "216%," but often it is inarguably a price that no one is selling at, and would fail many states consumer fraud laws .    Amazon needs to fear also a consortium of states going after its advertising of false prices practice. 
    edited July 2017 Muntzwelshdogpalomine
  • Reply 5 of 23
    gatorguygatorguy Posts: 23,469member
    Notsofast said:
    Not so fast.  Amazon has made a major mistake by pushing so prominently into major brick and mortar move with Whole Foods.  It has awakened people to the less than ethical aspects of what they are doing to destroy competitors. I support free market capitalism as it is designed to produce greatest benefit, but at some point, there is going to need to be a need for reexamination of anti-trust law where you have group of venture capitalists fund a company to run at a loss for many years as it gobbles up and destroys competition. When profit/loss is no longer important there is something wrong. 

    As for the controversial "discount" Amazon advertises, in many cases it is downright absurd, e.g., "216%," but often it is inarguably a price that no one is selling at, and would fail many states consumer fraud laws .    Amazon needs to fear also a consortium of states going after its advertising of false prices practice. 
    IMHO Amazon has less to fear from a fairly silly look at pricing practices than it does from a very real possibility of the Government taking a hard look at Amazon as just getting too darn big with fingers in too many things. I fully expect there to be some consideration given to the advantages of forcing them to break up into competing companies ala' Bell Telephone.
  • Reply 6 of 23
    NotsofastNotsofast Posts: 450member
    You say silly, but Amazon's business model is not only based on convenience, but on perception that you are getting the best deal, which many people have taken for granted. Anything that highlights pricing practices is not good for Amazon,  and a class action from the states, and/or major FTC lawsuit, will not be fatal, but will hurt Amazon, especially if Walmart and others can get their act together with on line.  In the end, most consumers will go for cheapest price if all things are equal.  Loyalty to Amazon is thin in that regard as Prime movies and free shipping can be easily duplicated.  Challenge for Walmart and others is significant, but if that can come up with a better website than they have, can match shipping and have lower prices, Amazon would be toast as the image they have masterfully created begins to crack.
    edited July 2017 StrangeDayswelshdogmacky the macky
  • Reply 7 of 23
    nhtnht Posts: 4,522member
    I would rather pay Satan directly than Walmart as a middle man.
    welshdogmassconn72
  • Reply 8 of 23
    StrangeDaysStrangeDays Posts: 12,252member
    Notsofast said:
    You say silly, but Amazon's business model is not only based on convenience, but on perception that you are getting the best deal, which many people have taken for granted. Anything that highlights pricing practices is not good for Amazon,  and a class action from the states, and/or major FTC lawsuit, will not be fatal, but will hurt Amazon, especially if Walmart and others can get their act together with on line.  In the end, most consumers will go for cheapest price if all things are equal.  Loyalty to Amazon is thin in that regard as Prime movies and free shipping can be easily duplicated.  Challenge for Walmart and others is significant, but if that can come up with a better website than they have, can match shipping and have lower prices, Amazon would be toast as the image they have masterfully created begins to crack.
    Yeah I'm struggling to understand why it's a "silly" complaint that Amazon (or any retailer) lists a bogus normal-price in order to make their price seem deeply discounted. I want transparency and honest from my retailers, so why on earth should I apologize for a deceptive pricing practice?
    pscooter63welshdogMacsplosion
  • Reply 9 of 23
    dkhaleydkhaley Posts: 57member
    I'm not sure I'm fully understanding the issue, but I initially don't see the problem. Is this referring to Amazon listing the MSRP of the product, then showing their price with the actual savings? If so, that's a pretty standard practice for many in person and online retailers.
    It's consumer deception. A more blatant example is typical bait-and-switch advertising, which is clearly unethical.

    The practice described above is more subtle than that. Assume the list price of a product is $50, the going market price is $35 and you buy it for $25. Congratulations - you just save $10. But the retailer is telling you saved $25. You and I can see through this, yet many people cannot.  MSRPs are suggestions, not market prices. It's a deceptive practice. Whether it's legal or ethical is another matter.
    StrangeDayswelshdog
  • Reply 10 of 23
    maestro64maestro64 Posts: 5,036member
    I know in one instance what Amazon is listing is the actual manufacturers list price on their website. Amazon's price was in fact less than the list price.  The manufacturer's list prices wss $599 and Amazon price was $450 and the discount listed was based on the $599.

    This consumer watch dog group claiming the list price is the price that Amazon sold it in the last 90 days is not the list price. Not sure where these people came up with that definition of list price. The last time I checked list price is the price the manufacturer says it should be sold for.

    I think these people are trying to make an issue out of something that is not an issue.
    gatorguyviclauyyc
  • Reply 11 of 23
    gatorguy said:
    Notsofast said:
    Not so fast.  Amazon has made a major mistake by pushing so prominently into major brick and mortar move with Whole Foods.  It has awakened people to the less than ethical aspects of what they are doing to destroy competitors. I support free market capitalism as it is designed to produce greatest benefit, but at some point, there is going to need to be a need for reexamination of anti-trust law where you have group of venture capitalists fund a company to run at a loss for many years as it gobbles up and destroys competition. When profit/loss is no longer important there is something wrong. 

    As for the controversial "discount" Amazon advertises, in many cases it is downright absurd, e.g., "216%," but often it is inarguably a price that no one is selling at, and would fail many states consumer fraud laws .    Amazon needs to fear also a consortium of states going after its advertising of false prices practice. 
    IMHO Amazon has less to fear from a fairly silly look at pricing practices than it does from a very real possibility of the Government taking a hard look at Amazon as just getting too darn big with fingers in too many things. I fully expect there to be some consideration given to the advantages of forcing them to break up into competing companies ala' Bell Telephone.
    I saw one comment the other day that got my interest. It said that it might be possible that Amazon wants to be the only Retailer left standing. Every competitor bigger than a mom and pop store is driven out of business. Sort of what Walmart tried and nearly succeeded but on a far bigger scale.
    all those Shopping Malls will be mighty empty places. Just a McD, Burger King and An Amazon collection point. An interesting thought.
  • Reply 12 of 23
    I think there's some confusion here. This is NOT simply a case of Amazon stating $50 MSRP, Amazon price $25, "you save $25!". I have personally noticed on many occassions where the price Amazon is basing the discount off of is actually HIGHER than the MSRP, not to mention higher than any other place has ever sold the item. So, hypothetical example, Amazon sells something for $50, says discounted 66% from $83.33, but the actual MSRP is only $75, and every other online store you can find the item in is selling for $50 or less. This isn't done across the board by any means, but I've noticed it many times of many years, and often point out how absurd it is to my wife, or coworkers. And to be clear, I use Amazon a lot, been a prime member for MANY years, but there's some really shady sh!t going on with their pricing. I'm surprised how few people know how frequently pricing changes, and differs between different shoppers, regions, etc. And I'm not talking about the pricing from the various different sellers, I mean Sold and Shipped by Amazon items. Put about 50 different "Sold by Amazon" items in your cart/save for later. Then go to the cart every day for a week or two, and it notifies you at the top of all the price increases and decreases. Prices definitely go up a lot more leading into Prime Day, etc. Pricing will also vary for me vs my wife, at the same time, on the same item, both sold directly by amazon. They have all sorts of data on their customers, and are constantly playing with algorithms to test people's price elasticity, impulsiveness at different times of day/night, etc.
    pscooter63StrangeDaysmacky the macky
  • Reply 13 of 23
    SpamSandwichSpamSandwich Posts: 33,407member
    Even if Amazon was inflating the list prices, it's incumbent on the consumer to research to find out if they are getting a good deal by comparison shopping. Buyer beware... always!
    pscooter63
  • Reply 14 of 23
    dick applebaumdick applebaum Posts: 12,527member
    gatorguy said:
    Notsofast said:
    Not so fast.  Amazon has made a major mistake by pushing so prominently into major brick and mortar move with Whole Foods.  It has awakened people to the less than ethical aspects of what they are doing to destroy competitors. I support free market capitalism as it is designed to produce greatest benefit, but at some point, there is going to need to be a need for reexamination of anti-trust law where you have group of venture capitalists fund a company to run at a loss for many years as it gobbles up and destroys competition. When profit/loss is no longer important there is something wrong. 

    As for the controversial "discount" Amazon advertises, in many cases it is downright absurd, e.g., "216%," but often it is inarguably a price that no one is selling at, and would fail many states consumer fraud laws .    Amazon needs to fear also a consortium of states going after its advertising of false prices practice. 
    IMHO Amazon has less to fear from a fairly silly look at pricing practices than it does from a very real possibility of the Government taking a hard look at Amazon as just getting too darn big with fingers in too many things. I fully expect there to be some consideration given to the advantages of forcing them to break up into competing companies ala' Bell Telephone.
    I saw one comment the other day that got my interest. It said that it might be possible that Amazon wants to be the only Retailer left standing. Every competitor bigger than a mom and pop store is driven out of business. Sort of what Walmart tried and nearly succeeded but on a far bigger scale.
    all those Shopping Malls will be mighty empty places. Just a McD, Burger King and An Amazon collection point. An interesting thought.

    Couple of things:

    First, for many home Moms/Dads, shopping is a social activity -- a chance to get out of the house, away form the kids* -- an engage in adult conversation.  Also, a bachelor  friend told me that grocery shopping was a great place to meet women.

    Second, I often use Amazon to Showroom stick and stucco stores... By that I mean, I use the Amazon site to:
    • gross compare multiple similar products, e.g. Power Drills
    • get questions answered
    • review ratings and comments
    • narrow choice to a few contenders
    • determine prices
    Then I vist the stick and stucco store for touchy-feely and usually make the purchase at lower or equal price to Amazon.
  • Reply 15 of 23
    SpamSandwichSpamSandwich Posts: 33,407member
    gatorguy said:
    Notsofast said:
    Not so fast.  Amazon has made a major mistake by pushing so prominently into major brick and mortar move with Whole Foods.  It has awakened people to the less than ethical aspects of what they are doing to destroy competitors. I support free market capitalism as it is designed to produce greatest benefit, but at some point, there is going to need to be a need for reexamination of anti-trust law where you have group of venture capitalists fund a company to run at a loss for many years as it gobbles up and destroys competition. When profit/loss is no longer important there is something wrong. 

    As for the controversial "discount" Amazon advertises, in many cases it is downright absurd, e.g., "216%," but often it is inarguably a price that no one is selling at, and would fail many states consumer fraud laws .    Amazon needs to fear also a consortium of states going after its advertising of false prices practice. 
    IMHO Amazon has less to fear from a fairly silly look at pricing practices than it does from a very real possibility of the Government taking a hard look at Amazon as just getting too darn big with fingers in too many things. I fully expect there to be some consideration given to the advantages of forcing them to break up into competing companies ala' Bell Telephone.
    I saw one comment the other day that got my interest. It said that it might be possible that Amazon wants to be the only Retailer left standing. Every competitor bigger than a mom and pop store is driven out of business. Sort of what Walmart tried and nearly succeeded but on a far bigger scale.
    all those Shopping Malls will be mighty empty places. Just a McD, Burger King and An Amazon collection point. An interesting thought.

    (snip)...Also, a bachelor  friend told me that grocery shopping was a great place to meet women...(snip)
    "You like food? Hey, what a coincidence... I like food!"  ;)
    edited July 2017 macky the macky
  • Reply 16 of 23
    dewmedewme Posts: 4,541member
    lkrupp said:
    Amazon, use the “everybody does it” defense because, well, everybody does it in fact. When we shop at Kohl’s, for instance, the clerk is always telling us how much money we ‘saved’. It’s even printed on the receipt, “You saved $63.27 today.” Really? We did? When the ticketed price is never what you wind up paying anyway I find it hard to swallow that I saved money.
    Exactly. Why would the FTC get into a twisted panty condition when the U.S. automobile sales and advertising model has been based on far more egregious phoniness since automobiles have been available for sale? The whole new car MSRP fakery and “dealer cost” invoices taped to new and used cars on sales lots, not to mention misleading and deceptive advertising on tv, radio, and internet. Then there’s the ultimate joy and truthfully information exchange that takes place when you actually walk into a car dealership showroom. So why would the FTC  pick on Amazon?

    What at the heck, I’d be thrilled if I could buy a new car on Amazon, with Prime two day delivery no less, comparative pricing and customer reviews, etc., rather than experience the bleeding hemorrhoid equivalence that walking into a new/used car dealership entails. Maybe Amazon needs to beef up its lobbying efforts so it can disrupt the entrenched consumer unfriendliness and deception that’s allowed in sales of automobiles, homes, and other large consumer purchases. The FTC should be more concerned that American consumers are losing thousands of dollars on the purchase of new automobiles (including excessive depreciation) than being whacked 19 extra pennies on some pepper jack cheese. 
  • Reply 17 of 23
    StrangeDaysStrangeDays Posts: 12,252member
    Even if Amazon was inflating the list prices, it's incumbent on the consumer to research to find out if they are getting a good deal by comparison shopping. Buyer beware... always!
    Nope, we have regulations in this country to protect consumers from deceptive sellers for a good reason. You can't simply put on your Libertarian Glasses and say "S'all good, my friends!" As a nation we have decided we don't stand for lying to people, customers included. Don't like it? Move to Hong Kong.
    edited July 2017 welshdogpalomine
  • Reply 18 of 23
    dick applebaumdick applebaum Posts: 12,527member
    gatorguy said:
    Notsofast said:
    Not so fast.  Amazon has made a major mistake by pushing so prominently into major brick and mortar move with Whole Foods.  It has awakened people to the less than ethical aspects of what they are doing to destroy competitors. I support free market capitalism as it is designed to produce greatest benefit, but at some point, there is going to need to be a need for reexamination of anti-trust law where you have group of venture capitalists fund a company to run at a loss for many years as it gobbles up and destroys competition. When profit/loss is no longer important there is something wrong. 

    As for the controversial "discount" Amazon advertises, in many cases it is downright absurd, e.g., "216%," but often it is inarguably a price that no one is selling at, and would fail many states consumer fraud laws .    Amazon needs to fear also a consortium of states going after its advertising of false prices practice. 
    IMHO Amazon has less to fear from a fairly silly look at pricing practices than it does from a very real possibility of the Government taking a hard look at Amazon as just getting too darn big with fingers in too many things. I fully expect there to be some consideration given to the advantages of forcing them to break up into competing companies ala' Bell Telephone.
    I saw one comment the other day that got my interest. It said that it might be possible that Amazon wants to be the only Retailer left standing. Every competitor bigger than a mom and pop store is driven out of business. Sort of what Walmart tried and nearly succeeded but on a far bigger scale.
    all those Shopping Malls will be mighty empty places. Just a McD, Burger King and An Amazon collection point. An interesting thought.

    (snip)...Also, a bachelor  friend told me that grocery shopping was a great place to meet women...(snip)
    "You like food? Hey, what a coincidence... I like food!"  ;)
    Reminds me of an old, old joke where owner of the carriage has painted the rear end of his horse.  His female passenger asks: why did you paint the rear end of your horse?  He answers...

  • Reply 19 of 23
    welshdogwelshdog Posts: 1,843member
    Even if Amazon was inflating the list prices, it's incumbent on the consumer to research to find out if they are getting a good deal by comparison shopping. Buyer beware... always!
    Nope, we have regulations in this country to protect consumers from deceptive sellers for a good reason. You can't simply put on your Libertarian Glasses and say "S'all good, my friends!" As a nation we have decided we don't stand for lying to people, customers included. Don't it? Move to Honk Kong.
    True that. Caveat emptor is fine for a personal credo but it cannot be the basis for our consumer protection laws. 
    StrangeDays
  • Reply 20 of 23
    dick applebaumdick applebaum Posts: 12,527member

    dewme said:
    lkrupp said:
    Amazon, use the “everybody does it” defense because, well, everybody does it in fact. When we shop at Kohl’s, for instance, the clerk is always telling us how much money we ‘saved’. It’s even printed on the receipt, “You saved $63.27 today.” Really? We did? When the ticketed price is never what you wind up paying anyway I find it hard to swallow that I saved money.
    Exactly. Why would the FTC get into a twisted panty condition when the U.S. automobile sales and advertising model has been based on far more egregious phoniness since automobiles have been available for sale? The whole new car MSRP fakery and “dealer cost” invoices taped to new and used cars on sales lots, not to mention misleading and deceptive advertising on tv, radio, and internet. Then there’s the ultimate joy and truthfully information exchange that takes place when you actually walk into a car dealership showroom. So why would the FTC  pick on Amazon?

    What at the heck, I’d be thrilled if I could buy a new car on Amazon, with Prime two day delivery no less, comparative pricing and customer reviews, etc., rather than experience the bleeding hemorrhoid equivalence that walking into a new/used car dealership entails. Maybe Amazon needs to beef up its lobbying efforts so it can disrupt the entrenched consumer unfriendliness and deception that’s allowed in sales of automobiles, homes, and other large consumer purchases. The FTC should be more concerned that American consumers are losing thousands of dollars on the purchase of new automobiles (including excessive depreciation) than being whacked 19 extra pennies on some pepper jack cheese. 
    Mmm...

    Time was when (1953) you could buy a car at Sears -- an Allstate (a Henry J Kaiser) for around $1,500:

    1952-allstatejpg

    https://en.wikipedia.org/wiki/Allstate_(automobile)


    Even earlier (1939), Sears sold a Home Kit for around $1,000.



    The Cape Cod (Model No. 13354A, 13354B); ($886 to $1,097)

    http://www.searsarchives.com/homes/1933-1940.htm
    http://www.searsarchives.com/homes/index.htm


    Then, there's this Jean Shepherd classic:  Sears Roebuck Kit House:




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