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Compelling Commentary on Law Affecting Business

The Litigator
AGM :: Affleck Greene McMurtry LLP

THE LITIGATOR

Affleck Greene McMurtry LLP
365 Bay Street, Suite 200  ·  Toronto, Canada
416 360 2800  ·  info@agmlawyers.com  ·  www.thelitigator.ca

Amazon pays $1.1 m to settle savings claim probe

.com.ca Inc. has agreed to pay a $1 million penalty, plus $100,000 in costs, to settle allegations by the Competition Bureau that its practice of advertising savings from a list price contravened the Competition Act’s and misleading email provisions.

Convenient but not necessarily cheaper

The ordinary selling price provisions require that for a retailer to advertise a ordinary selling price for a product, either a substantial volume of the product must have been sold at that price (or higher), or the product must have been offered for sale at that price for a substantial period of time.

On its website and in emails, Amazon often compared its prices to list prices and included a claim that consumers would save the difference, for example:

List Price: CDN$ 39.99
Price: CDN$ 29.99 & FREE Shipping on orders over CDN$ 35. Details
You Save: CDN$ 10.00 (25%)

Amazon was relying on its suppliers to tell it what the list prices for products were; it did not validate those prices against suppliers in the market generally. Amazon made changes to its advertising policies even it became aware of the Bureau’s concerns. It also implemented a compliance program.

Amazon entered into a consent agreement in which it agreed to comply with the ordinary selling price price and misleading email provisions, and to pay an administrative monetary penalty of $1 million, plus $100,000 in costs.

 

W. Michael G. Osborne
Affleck Greene McMurtry LLP

W. Michael G. Osborne

Michael leads Affleck Greene McMurtry LLP's competition team. He also practices commercial litigation and arbitration. Michael represents clients involved in business disputes, and defends clients facing competition law investigations, prosecutions, and class actions.

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