The United States Federal Trade Commission (FTC) is currently investigating claims that Amazon engages in misleading discounting practices, a source with knowledge of the situation said on Friday. The agency's latest probe is being conducted as part of its review of Amazon's acquisition of Whole Foods that the Seattle, Washington-based company announced in June, revealing it's paying close to $13.7 billion for the supermarket chain. The original claim against Amazon was made by Consumer Watchdog, a consumer protection and advocacy group that analyzed approximately 1,000 product listings on Amazon last month, concluding that close to half of them featured reference (list) prices. Around 61 percent of such products were listed with what Consumer Watchdog deems are misleading and highly deceptive reference prices as the products weren't selling for those figures for at least three months, the NGO claims.
The complaint was reportedly filed with the FTC on July 6, after which the federal agency proceeded to make a number of unofficial inquiries into the matter, one insider claims. The tech giant promptly dismissed the accusations by criticizing Consumer Watchdog's survey that it labeled as "deeply flawed," adding that its findings are plainly "wrong." According to the company, all of the reference prices listed on its website are provided by product manufacturers and vendors, in addition to being independently verified by Amazon. The group didn't respond to that rebuttal but continues to advocate for a more thorough review of Amazon's business practices, urging the FTC to force the company into adopting a more transparent pricing mechanism before its acquisition of Whole Foods is approved.
It's currently unclear whether the FTC is planning on launching a formal investigation based on the aforementioned claims and how long such a probe may last. Some industry watchers previously speculated that the current U.S. administration won't be keen to facilitate Amazon's mergers and acquisitions due to the company's tense relations with President Trump, albeit such a scenario remains purely hypothetical. The current U.S. President was often critical of Amazon and its founder and Chief Executive Officer Jeff Bezos in the past, alleging that the business magnate doesn't pay enough taxes and attacks his administration using The Washington Post, though the tensions between the two never escalated any further to this date.