Amazon is being sued by a coalition of California prosecutors, including the San Diego County District Attorney's Office, for allegedly misleading consumers regarding pricing on its website.
Prosecutors allege Amazon misleads buyers by featuring "reference pricing" in its advertisements for various products. This refers to when products' current prices are listed next to a former, higher price the product was previously sold at — often called "Was" prices — or prices the products are usually sold at by other sellers, suppliers or the manufacturer, often called "List" prices, the suit says.
An Amazon representative said the company did not have a comment regarding the case, but provided a statement that read, "Amazon works hard to help customers make informed purchase decisions, including clear pricing information directly on our detail pages."
According to the complaint, the "Was" prices may be misleading, as there are often "insufficient temporal constraints and/or number of sales to support the reference price as a former price" as well as "insufficient disclosure to the consumer of the methodology used to derive the former price."
Additionally, the "List" prices "insufficiently disclosed that the reference price was not necessarily the prevailing market price or regular retail price for which the product could be purchased," according to the suit filed Wednesday in San Diego Superior Court.
Amazon's policy regarding List and Was Prices is available through a link on product pages that feature a reference price.
The policy states that Was prices are determined using the 30-day median price paid by customers for the product on Amazon.
List Prices are "the suggested retail price of a product as provided by a manufacturer, supplier, or seller. Amazon will only display a List Price if the product was purchased by customers on Amazon or offered by other retailers at or above the List Price in the past 90 days. List prices may not necessarily reflect the prevailing market price of a product."
The San Diego District Attorney's Office was joined in the complaint by the district attorney's offices in Riverside, Alameda, Santa Clara, Santa Cruz and Yolo counties.
