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The encyclopedia · Advertising & PR · Marketing decision · 2017

Amazon.ca's 'list prices' were never verified — Canada fined it $1.1M

Jan 2017: Amazon paid Canada $1.1M — it compared its prices to supplier 'list prices' it never verified, manufacturing savings on the page.

Amazon.com.ca Inc. · 2017-01

What happened

Amazon.ca signalled savings the way marketplaces do: a struck-through 'list price' beside its own price, the gap implying a deal. Between May 2014 and May 2016 those list prices came from suppliers, and Amazon relied on them without verifying they were real — that the product had actually been offered at that price. The Bureau concluded the savings claims were false or misleading, on the website, in mobile apps, in online ads and in customer emails.

The investigation reportedly looked as closely as twelve Blu-ray movies, but the remedy was platform-wide. On 11 January 2017 Amazon signed a consent agreement: a $1 million penalty plus $100,000 toward the Bureau's costs, procedures to validate supplier list prices, and changes to how savings are advertised — reaching beyond Amazon.ca to practices on amazon.com.

Commissioner John Pecman called it 'shared compliance': consumers are drawn to savings claims, so the marketplace that displays the claim owns the verification. The case made the struck-through price a substantiated claim in Canada, not a supplier's suggestion.

Why it happened

  • The struck-through price did the selling — and nobody checked whether it had ever been the price.
  • A list price supplied by the seller is an incentive to inflate; Amazon adopted it without validation.
  • The savings claim ran across site, app, ads and email: the same unverified number, four surfaces.
What it cost$1M penalty + $100K costscostly

The lesson

A struck-through 'list price' is a savings claim: relying on supplier numbers without checking them turns every discount shown into a misleading representation.

Aftermath

Amazon validated supplier list prices and changed how savings are displayed, with policies extending to amazon.com. The Bureau cites the case as its model for 'shared compliance' with platforms.

Sources

spotted an error? The club wants to know.

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