Amazon is now on the hook to pay a $1.1 million fine to Canada’s Competition Bureau. The fine is part of a punishment slapped against the retail giant for misleading consumers with erroneous prices on its Canadian website, www.amazon.ca.
The Competition Bureau, an independent law enforcement agency, recently investigated Amazon’s pricing practices between May 2014 and May 2016. Prices posted on its site were compared to a “list price” that had a line slashed through it, ultimately leading consumers into thinking that they were saving money by purchasing the item on Amazon as opposed to another retailer. As it turns out, the suggested savings incentive was never verified by Amazon, according to the bureau’s findings.
Amazon’s actions violate the Competition Act, a law that safeguards from being deceived by inflated regular prices. The pricing issue appeared not only on the Amazon.ca website, but also on Amazon’s mobile apps, online ads and even emails sent to consumers.
“Consumers are naturally attracted to claims that they will save money,” said John Pecman, commissioner of competition.
As a result, Amazon will be paying $1 million to the government and another $100,000 to cover the costs of the agency’s costs in resolving the issue.
“These claims created the impression that prices for items offered on Amazon.ca were lower than prevailing market prices,” according to a statement about the case from the bureau. “The agreement reached today resolves the bureau’s concerns and sends a clear message to the marketplace that unsubstantiated savings claims will not be tolerated.”
Amazon has since changed its advertising in regards to the list price concern. The retailer has also applied those changes to its main site, Amazon.com.
“This ensures that consumers are provided with accurate information and not misled by savings claims,” said Pecman.