In 2014, Canada's Competition Bureau launched an investigation into the list prices of Amazon Canada. These list prices were meant to give consumers an idea of how much they can save if they opted to purchase a certain item from Amazon. This is presented by each item having two prices. The higher one, struck out with a line, is the claimed market value of the product. While the lower price underneath it is how much it costs to purchase the item on Amazon.
An examination of Amazon Canada's pricing representations was initiated by the Competition Bureau to check if the Competition Act is upheld. According to the Competition Bureau: "The Competition Act is designed to ensure that, if an advertiser claims that its price for a product is discounted compared to the prevailing or ordinary market price, then that savings claim must be accurate." According to Mashable, it was then discovered that Amazon simply relied on their suppliers to provide them with accurate regular prices of the items without any means to verify if the information is indeed accurate.
In clear violation of the Competition Act, Amazon Canada was penalized for $1 Million, and an additional $100,000 for legal fees incurred by the Bureau over the course of the investigation. The company has then since implemented stricter policies on the way they acquire regular prices from their suppliers. "We're pleased that Amazon has put procedures in place to validate list prices received from its suppliers." said the Commissioner of Competition, John Pecman, on the Bureau's official website.
According to a report done by The Hamilton Spectator, the Bureau is authorized to set a fine of up to $10 Million, depending on certain parameters. It is lucky for Amazon that they were not penalized to the full extent of the Bureau's capabilities. There has been no official statement from Amazon regarding the incident or decision by the Competition Bureau as of this writing.
