(NEXSTAR) – Two individuals are taking legal action against Amazon, claiming that the retailer is misleading shoppers by showcasing “fake sales” during its popular Prime Day events.
Prime Day is marketed as a chance for members to grab “some of the best deals from top brands,” but the lawsuit suggests that these discounts may not be what they appear to be.
Throughout the multi-day event, various products on Amazon’s site feature a red “Prime Day Sale” tag, often displaying a percentage discount from a price that has been crossed out.
The lawsuit, lodged in a Washington state court, contends that Amazon often arrives at steep discounts by subtracting from inflated list prices. For instance, Shokz earphones were spotlighted in the complaint as an example of a misleading list price.
The complaint states, “For example, the image shows a ‘list price’ of $179.95, but that price was not the Amazon list price for the headphones pictured for more than 90 days before the supposed Prime Day sale.” It argues that the actual “list price” has consistently been much lower, falling between $130 and $160.
In another case mentioned, a children’s tablet offered for 40% off (priced at $72.28 from $119.99) during Prime Day reportedly sold for anywhere from $50 to $85 in the 90 days prior to the sale.
The plaintiffs, one residing in California and the other in Maryland, are accusing Amazon of enticing shoppers who might have otherwise sought better deals in the market or held off on purchasing the items.
When reached for comment, an Amazon representative opted not to provide any remarks regarding the lawsuit.
Amazon reaches $2.5 billion settlement with FTC
This legal action comes on the heels of Amazon’s $2.5 billion settlement in September, following accusations from the Federal Trade Commission (FTC) about misleading customers into enrolling in Prime memberships and complicating the cancellation process.
This case centers around the Restoring Online Shopper Confidence Act, a law enacted in 2010 to ensure transparency regarding online charges.
For $139 a year or $14.99 monthly, Amazon Prime gives subscribers benefits such as speedier shipping, video streaming, and discounts at Whole Foods.
This subscription service is an essential part of Amazon’s business, with over 200 million members. In its most recent financial report, the company indicated that its net revenue from subscription services surpassed $12 billion, marking a 12% year-over-year increase. This includes earnings from both Prime membership and other subscription platforms like music and e-books.
The FTC has stated that Amazon has purposefully made it challenging for customers to buy products without being Prime members. In some cases, buyers were directed to a button to finalize their transactions, but it did not clarify that enrollment in Prime was a requirement.
According to the FTC, canceling a subscription is often unnecessarily complicated, and Amazon has delayed or refused alterations that could simplify this process.
Internally, Amazon has referred to this complicated cancellation procedure as the “Iliad,” after the ancient Greek epic detailing the long siege of Troy. Customers are required to confirm their intention to cancel their membership by navigating to the third page.
The FTC started probing Amazon’s Prime membership practices back in 2021 during the previous Trump administration, but the lawsuit was filed in 2023 under existing law.
The authorities initiated the case months prior to launching another lawsuit that accused retail and tech companies of monopolistic practices through online platforms.
Amazon has denied any wrongdoing related to the lawsuit that initially emerged two years ago.
