On Thursday, the District Attorneys of San Diego, Yolo, Santa Cruz, Alameda, Santa Clara, and Riverside Counties, along with several of their Consumer Protection Units announced that they reached a $2 million civil judgment in their consumer protection suit against Amazon, whereby the District Attorneys alleged that some of Amazon’s reference price advertisements were or could be misleading to consumers who are making purchase decisions.
The press release stated that Amazon typically uses reference prices via its “Was” or “List” prices “to advertise savings (or value) to consumers.” The District Attorneys noted that a “Was” price indicates that there has been a price reduction and a “List” price suggests the price point at which that item is commonly sold. For instance, a product at $15.99 next to a reference price of, for example, Was $19.99 or List Price $21.99. However, the District Attorneys “determined that there were issues with how Amazon determined these reference prices and whether words like ‘Was’ or ‘List’ were used in a manner that was misleading to consumers.” The District Attorneys asserted that their investigation focused on how Amazon determined these reference prices and if the terms “Was” or “List” were used in a way that could mislead consumers.
Pursuant to the final judgment issued by Judge Katherine A. Bacal of the San Diego Superior Court, Amazon must modify its “Was” and “List” pricing disclosures to “explain the way it determines and validates it(s) reference prices.” Specifically, these changes include adding a hyperlink to define the “Was” and “List” price advertisements so consumers clearly understand the difference and learn about these advertised savings. Additionally, Amazon will pay $2 million in penalties, costs, and restitution to California’s Consumer Protection Trust Fund.
“When consumers shop online, they need to be able to trust that when a product is advertised as being a bargain, it truly is,” San Diego District Attorney Summer Stephan said in the press release. “This judgment should remind retailers that the law requires them to provide accurate information so consumers can make informed purchasing decisions. Our Consumer Protection Unit continues to hold companies accountable and collaborate successfully with our prosecution partners across the state of California.”
Yolo County District Attorney Jeff Reisig stated, “This settlement is vital in the ongoing efforts to make sure that consumers have accurate and reliable information when making price comparisons.”
In the press release, the District Attorneys noted that Amazon cooperated with their investigation and “has already implemented changes to its website and pricing algorithms consistent with the Final Judgment.”
