FTC Probing Amazon for Deceptive Pricing After Whole Foods Deal

As part of its review of Amazon.com's recent purchase of Whole Foods, the Federal Trade Commission is looking into allegations that the retailer misleads customers about its pricing discounts, a source told Reuters on Thursday. The FTC is probing a complaint brought by the advocacy group Consumer Watchdog, which reviewed some 1,000 products on Amazon's website in June and found that the retailer put reference prices, or list prices, on about 46 percent of them. An analysis found that in 61 percent of products with reference prices, Amazon's reference prices were higher than it had sold the same product for in the previous 90 days, Consumer Watchdog said in a letter to the FTC dated July 6. Amazon said in a statement that Consumer Watchdog's study was "deeply flawed."

Total Retail’s Take: Earlier this week, we reported that the Amazon-Whole Foods deal sparked antitrust concerns in Washington. Critics of the deal say that it could give Amazon an unfair advantage in the grocery space, despite the fact that Whole Foods had just 1.6 percent of the U.S. grocery market. The latest news on Amazon's pricing doesn’t figure to make the approval process any easier for the FTC. Consumer Watchdog argued that the deceptive list prices make Amazon's prices look like a bargain, and asked the FTC to stop Amazon from acquiring Whole Foods while the practice of deceptive discounting is still occurring. We will be keeping a close eye on this story as it develops.