'Prime' suspect: Amazon investigated by FTC over pricing practices

Are you really getting as good of a buy on Amazon as the website claims when it offers a “discounted” price?

The Federal Trade Commission is about to take a closer look at the situation…

Is Amazon guilty of the “was/is” pricing trap?

It’s probably safe to say that Amazon isn’t exactly on the FTC’s good side right now.

First we had the e-commerce giant locked into a protracted battle with the FTC over unauthorized in-app purchases made by minors. Only within the last month or so did Amazon relent and agree to pay $70 million in refunds to customers.

Now we have the FTC beginning its review into Amazon’s planned buyout of Whole Foods.

Reuters reports that as part of that review, the FTC is fielding a request from a consumer group to investigate whether or not the company has deceptive pricing practices online.

Consumer Watchdog did a study of Amazon's pricing on 1,000 items and found 46% of them have reference prices, also known as list prices.

But the list prices were higher on 61% of products than the product actually sold for in the past 90 days.

That effectively creates a false reality of “was/is” pricing. You think you’re getting a deal on something based on an inflated list price. But you’re not necessarily getting the deal you think you are!

Consumer Watchdog wants the FTC to halt Amazon's march toward acquiring Whole Foods until this online pricing issue is resolved.

A source close to the probe says that while the FTC is looking into the Consumer Watchdog claims, it’s not yet known whether or not a formal investigation will come of it.

So the reality is we’re not quite sure how this is all going to play out yet…

Amazon responds

In the meantime, Amazon has responded to the Consumer Watchdog allegations, calling their study of its pricing “deeply flawed.”

“The conclusions the Consumer Watchdog group reached are flat out wrong,” Amazon said. “We validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.”