Amazon Enters Settlement With California Counties In Reference Pricing Lawsuit
Six California counties have entered into a settlement agreement with online retail giant Amazon after it was accused of using reference pricing tactics that end up misleading customers.
According to local reports, the district attorneys from the counties of Yolo, Alameda, Riverside, Santa Cruz, Santa Clara, and San Diego filed a lawsuit against Amazon.
The Amazon Price Referencing Lawsuit contends that the company has used malicious reference pricing methods that end up confusing customers trying to shop items on the online e-commerce platform.
It is reported that Amazon uses an algorithm in its system in order to enforce its price referencing methodology.
The company, according to the Amazon Price Referencing Lawsuit, argues that Amazon uses indicators such as “list” or “was” on items’ prices in order to advertise savings to online shoppers.
“Was” product prices allegedly indicated how much Amazon formerly charged for the product, while the “list” product price showed how much the item is being sold by other third-party sellers.
As a result of the settlement agreement, Amazon will pay up more than $2 million worth of funds in order to quell the ongoing legal saga.
The company will primarily set aside $1.7 million as a form of a civil penalty. It would be paid to the Riverside district attorney’s office. It will then be subdivided among the other five participating district attorney offices.
An amount of $200,000 will be allocated for investigative costs, while a hundred thousand dollars will be handed over to the California Consumer Protection Fund.
This after all of the parties involved have agreed that the latter amount would be beneficial for the fund’s goals.
In addition to the monetary payment, Amazon promised to cease using its price referencing tactics in the state of California and consumers within the state based on its algorithm and other methodologies.
Editor’s Note on Amazon Price Referencing Lawsuit Settlement 2021:
This article features the latest settlement agreement between Amazon and a number of California counties involving concerns of allegedly misleading reference pricing tactics employed by Amazon.
With the use of different methodologies, Amazon reportedly published confusing prices that end up puzzling California online shoppers.
Case Name & No.: People of the State of California v. Amazon.com Inc.; Case No. 37-2021-00011984-CU-BT-CTL
Jurisdiction: Superior Court of the State of California, County of San Diego
Products/Services Involved: Amazon’s reference pricing methods
Allegation(s): Amazon has employed puzzling reference pricing practices that ended up confusing and misleading California customers shopping on the online platform.
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