Amazon to Pay Fine Related to Pricing Practices in Canada
January 11 2017 - 2:27PM
Dow Jones News
By Paul Vieira
OTTAWA -- Amazon.com Inc. agreed to pay a fine and change its
pricing practices in Canada after a two-year investigation
concluded the online retailer made unsubstantiated claims about
savings on certain products, Canada's antitrust agency said
Wednesday.
Canada's Competition Bureau said it reached an agreement with
Amazon over its findings, adding Amazon's cooperation and efforts
to address the agency's concerns meant it received "more favorable
[treatment] than would otherwise have been the case."
A representative for Seattle-based Amazon.com wasn't immediately
available for comment.
The bureau said Amazon.com agreed to pay a fine of 1 million
Canadian dollars ($756,029) and an additional C$100,000 to cover
the agency's investigative costs. The agreement "ensures that
consumers are provided with accurate information and not misled by
savings claims," said John Pecman, head of the Canadian antitrust
agency.
A copy of the agreement between the bureau and Amazon.com wasn't
immediately available for viewing.
Canadian retail statistics indicate online sales in October
reached C$1.1 billion, or 2.3% of total retail sales in the
country.
Amazon has challenged the retail industry with frequent online
price changes, something that changes how shoppers compare prices,
how product manufacturers look to sell their wares and how
traditional retailers price goods. Amazon has become known for
being willing to give up profit on a popular item to capture more
sales and to maintain its reputation for having the lowest prices,
even if that doesn't apply to every single item.
The antitrust agency said that over the course of two years,
ended last May, it monitored Amazon.com's Canadian website on a
daily basis and examined the promotion of savings on a dozen
Blu-ray movies. The retailer, the bureau said, would show Amazon's
cost to be lower than the prevailing market price.
The bureau's investigation suggested Amazon relied on its
suppliers to provide list prices "without verifying that those
prices were accurate."
The agency said suppliers hadn't sold the Blu-ray movies in
substantial volumes at the quoted list price or higher for a
significant period, such as 12 months.
Amazon's claims "did not accurately reflect the savings
available to consumers," the bureau said.
--Laura Stevens contributed to this article.
Write to Paul Vieira at paul.vieira@wsj.com
(END) Dow Jones Newswires
January 11, 2017 14:12 ET (19:12 GMT)
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