Amazon paying $1.1m to settle Canadian price advertising case

Canada’s Competition has announced that Amazon will pay a $1 million penalty and $100,000 towards the Competition Bureau’s costs as part of an agreement resolving the Bureau’s concerns with the online retailer’s pricing practices on its Canadian website. The Bureau’s concerns related to pricing practices on www.amazon.ca between 27 May 2014 to 1 May 2016.

In a statement issued yesterday (11 January), the Competition Bureau said: “Amazon often compared its prices to a regular price—or “list price”—signaling attractive savings for consumers. The Bureau’s investigation concluded that these claims created the impression that prices for items offered on www.amazon.ca were lower than prevailing market prices. The Bureau determined that Amazon relied on its suppliers to provide list prices without verifying that those prices were accurate. The savings claims were advertised on amazon.ca, in Amazon mobile applications, in other online advertisements, as well as in emails sent to customers.

“Amazon has already made changes to the way it advertises list prices on its Canadian website to accurately represent the savings available to consumers. The policies put in place by Amazon have had an effect beyond the Canadian website, including on savings claims for products sold on www.amazon.com.

“The penalty and the changes in pricing practices are part of a consent agreement that is registered with the Competition Tribunal and has the force of a court order.”

The Bureau added that yesterday’s agreement resolves its concerns and “sends a clear message to the marketplace that unsubstantiated savings claims will not be tolerated”.