Canada fines Amazon seven hours of profit for false advertising

Canada's Competition Bureau has administered what it thinks is a stinging fine for Amazon, but it's unlikely that CEO Jeff Bezos will be losing much sleep over it. The bureau ruled that Amazon was misleading Canucks by comparing its prices with a so-called list price to illustrate what savings could be had. But the list price …

[Commswonk]

Dear Canada...

Do you think we could borrow your Competition Bureau for a little while? We have a teensy weeny problem with our supposed regulators who seem all too happy to conspire with those they are supposed to regulate, the effect of which is that the customer gets ripped off.

By way of example Ofgem allows all sorts of chicanery with price comparisons, such that consumers change their energy suppliers in the hope of making savings; mysteriously the savings simply never materialise, at least not on the scale the consumers anticipated.

Yours, etc,

The UK.

[Anonymous Coward]

Re: Dear Canada...

The Ofgem example is not the best ... the problem with most of the incorrect potential savings comes directly from Ofgem's rules as they say suppliers can only quote for annual savings by quoting a no-switch price on the basis of what you would pay if you did nothing. So anyone approaching the end of a fixed rate gets quoted a great saving but only becuase the comparison price is probably based on the last few weeks of the fixed rate followed by almost a year on the totallu uncompetitive "standard rate". As a result almost any non-standard rate will show a saving but is probably not much different from the current rate.

Anyway, for Amazon there's the slight issue that there daily and lightening deals often quote huge savings when that is just a reduction from RRP and the normal non-deal Amazon price is not much more .... e.g. in the past I've discovered thatt a "deal" of 40% off is actually only 5% cheaper than their normal price or 35% less than RRP

[Martin Summers]

Re: Dear Canada...

"So anyone approaching the end of a fixed rate gets quoted a great saving but only becuase the comparison price is probably based on the last few weeks of the fixed rate followed by almost a year on the totallu uncompetitive "standard rate". As a result almost any non-standard rate will show a saving but is probably not much different from the current rate."

Thankfully the MSE energy club allows you to do the price comparison from what you are paying now, which is of course much more sensible. I'm not sure what was going on at Ofgem when they came up with the idea of mandating a comparison against standard rates.

[Barry Rueger]

Re: Dear Canada...

Obviously,unlike the banking cartel, the cel phone cartel, the oil cartel, and the media cartel, Amazon didn't donate enough cash to the governing parties to buy freedom from prosecution for anti- competitive practises.

Amateurs.

[raving angry loony]

Re: Dear Canada...

Amazon donated plenty. $1 million is a paltry "fine", not even a slap on the wrist, more of a "we know you did wrong, naughty naughty, but we're not going to make it hurt. The "Competition Bureau" in Canada is more concerned with making sure corporations make as much profit as possible rather than anything resembling consumer protection.

[Anonymous Coward]

Re: Dear Canada... re Of (gem, etc. etc)

We, the Ofs of the Great Britain would like to strongly protest our innocence and stress that "having no teeth" is no less than false advertising and we are now oblidged to go to great expense (hurrah!) to draft and publish an angry letter stating so.

p.s. we have no teeth, because we were issued any by our paymasters, and if you knew where to dig, you'd probably find out why. But then, rest assured, any such findings would be surpressed as "not inducive (condusive)? to the benefit of the public" and so would public inquiry and prosecutions. In plain English: one law for the plebs, another for the Masters.

Sincerely yours,

The Ofs

[Innocent-Bystander*]

Re: Dear Canada...

No but you can have the CRTC (Telecom regulator). Not sure how that will help your current situation though... :)

[a_yank_lurker]

List Price

AFAIK in down in the States it is considered proper to compare prices with the list price. That is the nominal retail price one could expect to pay. Otherwise what to do you compare to?

[Commswonk]

Re: List Price

In the UK it's a bit messy, or can be.

A customer may be on a fixed term contract for energy at a given price per kWH. That price may well be less than the supplier's "standard" price.

Customer then does an on - line price comparison, but Ofgem allows the suppliers to ignore the existing contract price and produce a comparison between a "new" offer and projected costs based on the (higher) standard price. This results in the customer being tgempted by saving larger than that between what they are currently actually paying and the offered price.

On the basis of that offer they switch providers only to find that the promised saving never actually materialises; they may be paying less, but not as much less as they had been lead to believe.

This chicanery has been talked about on various consumer programmes in the UK but of course the scam goes on... and on... and on...

[Remy Redert]

Re: List Price

Well, you could compare to the prices of your competitors or to the pre-sale price of the item. The former gives a much better comparison of your savings, but requires regular updating of your competitor price lists. The latter gives accurate savings vs buying it outside the sale, but don't compare to prices from other vendors.

[a_yank_lurker]

Re: List Price

The real problem for price comparisons is what is used as the basis. Retail list price, which may not the actual price charged by anyone, has the advantage is that it is the official price suggested by the manufacturer.

Comparing against your competitors can be very tricky. With electronics manufacturers have been known provide very similar models to retailers with minor differences in the specifications. Thus they are different models. TVs are well known to suffer from this.

[Alan Brown]

Re: List Price

"AFAIK in down in the States it is considered proper to compare prices with the list price. "

In several countries it is _illegal_ to have a manufacturer "list price" or "recommended retail price" for consumer products. The idea is that retailers must set their own price using their own policies and to discourage cartel behaviour.

[Anonymous Coward]

Personally...

I do due diligence on my own shit, but still get caught out sometimes and very annoyed with myself for letting it happen.

The time and effort involved in doing this doesn't scale so we all need effective regulators.

It's sad that none of us will ever get one.

Sigh :-(

[hellwig]

Why would Amazon stop?

If they get caught again, do the damages go up? Seems to me this might generate more sales than the cost of the fine. If Ford could weight the value of human life with the Pinto, I don't think anyone at Amazon has to lose any sleep over lying about how expensive something really is.

[robidy]

Re: Why would Amazon stop?

In the UK you can end up having to get your adverts approved by the regulator before running them...you could easily drag heels so you approved the easter adverts on say the Tuesday after easter...it's not a place an advertiser would want to be.

[JLV]

Good enough for me.

Canada does have some rules about ads and prices. For example, you can't just say 'Sale -30% off' if the "discounted" price is your standard day to day price and you never change it. Retailers have been taken to court here, and lost, for doing so.

I am totally OK with them suing Amazon and taking only a limited penalty. The point is not beggar Amazon with punitive damages. Nor is it to hurt them hard enough to trigger them into endless defensive litigation. And it is most certainly not about introducing a lot of regulation about what a retailer can do - consumers should be savvy enough to figure things for themselves. Especially in low-consequence outcomes like where to buy basic goods. We're not talking life-critical medication here.

The point is to have them stop false advertisement, enforcing some basic honesty and covering the court costs. I'd say mission accomplished, if they desist. If they don't, sue them again and make a bigger news splash about it while doing so.

Name & Shame.

p.s. 'sides the metric isn't really about % of global profits. It's % of Canadian profit. Because Amazon would surely start worrying if it is was getting dinged <1% of profit in multiple countries. That adds up.

[Commswonk]

Re: Good enough for me.

The point is to have them stop false advertisement, enforcing some basic honesty...

An particular pet hate of mine is the "Closing Out Sale " signs that appear in shop windows, usually on paper or card coloured to injure the eyeballs of passers - by.

WTF is a "Closing Out" sale? I wish I had to the courage to march into the offending premises and ask that very question, in a very loud voice.

[Voland's right hand]

Since when does Amazon have a profit

I thought they reinvested everything and declared even or a loss out of principle. Profit? That is a nouvelle concept.

[JeffyPoooh]

Re: Since when does Amazon have a profit

I came here to post "Amazon? Profit?", but you essentially beat me to it. Cheers.

[Anonymous Coward]

Ah, but this is first strike..

This is a first fine and yes, it's probably on the low side.

However, this conviction establishes both a first offence and a precedent, which means a lot more hurt the next time they get caught.

[JeffyPoooh]

Next, they could tackle the definition of "Two-Day"

I'm still batting ZERO for over a dozen examples. Minimum seems to be four days, and over a week in several cases.

Yes, YMMV.

No, it's not my fault.

No, a largish city in eastern Canada.

Yes, I'm only counting the shipping time.

No, Yes, No, No, No...

[Paul Renault]

Re: Next, they could tackle the definition of "Two-Day"

Me, I (almost) always opt for the 'Free Shipping' (not Prime) if it's available. It's surprising the number of times I've had it delivered in less than four days - small town in the Maritimes.

If it's something I need really fast, I drive the 2kms to the local stores.

[JeffyPoooh]

Re: Next, they could tackle the definition of "Two-Day"

You're right. The two shipments that were delivered to me by the 3rd day were "Regular" (Canada Post) shipping.

It's the "Two-Day" shipping where 'two' = 4 to 7.

My latest purchase, I selected "Regular", anticipating Canada Post. They sent it UPS, it took four days.

[Anonymous Coward]

Re: Next, they could tackle the definition of "Two-Day"

Don't worry - delivery can be a bugger everywhere. I live in a major european city, and my record for amazon "two-day" delivery so far is just under one month (three and a half weeks, if I recall correctly). For about two and a half weeks, the delivery company's tracking system was giving a real-time position of my parcel on a delivery van, which was circling through the neighbourhood, always less than couple thousand feet from my place, and never quite making it before the driver's shift end. After the first couple of days, it was actually quite funny.

On the other hand, I also had a number of "order by 6pm, in before noon next day" amazon deliveries, too, so the overall experience varies greatly.

Part of the problem is proliferation of courier companies, which all compete on price and happily race each other to reach the rock bottom of quality.

[The First Dave]

Re: Next, they could tackle the definition of "Two-Day"

I _really_ wish that retailers would tell you who their courier company is, up front, and better still give you a choice.

[GrapeBunch]

Here I am, a Canadian, and all along I thought that retailers could legally compare with List Prices. I already took that into account when contemplating amazon.ca purchases. My impression remains that some outlets (Brits might call them High Street shops) actually do charge List Price, in general, but of course most shopping is done at big- or medium- box retailers (how can I give this the right flavour?) such as Canadian Tire. Notice flavour but not tyre; mouse has strange bedfellows.

It's apples vs oranges comparing retail with utility. Were I a commission, I'd come down smartly on utility price misdirection. And I'd also have fined a whole raft of businesses (and gov't operations) here on retail practices before fining amazon.ca. I suppose it's not fair to give only a partial list. And nobody is talking about employee practices here, that is another topic.

amazon.ca customers have pretty easy access to amazon.com customer reviews, but I've found that amazon.co.uk comments are often more thoughtful, even if it takes a few extra clicks to find the exact same item. I've even purchased from amazon.co.uk, though not recently, on small items, being extra careful that they are fit for purpose on this side of the pond. Hint: if they plug into the wall, they probably aren't.

[Baldy1138]

As A Canadian, I would Just Like to Add ...

... that Amazon prices are insanely discriminatory against Canadians. Sometimes, just for fun, I'll look at a product at amazon.com, then try to guess the most outrageous Canadian price, then change the ".com" to ".ca." Usually, much laughter ensues (yes, including currency exchange). And that's not even including the exchange penalty imposed by banks, import duties, customs, shipping, tax ... and that's assuming I haven't gone mad ans selected UPS as my shipper. Whatever happened to NAFTA?

[Barry Rueger]

Re: As A Canadian, I would Just Like to Add ...

Whatever happened to NAFTA?

Silly rabbit. You actually thought that NAFTA was intended to benefit the proles?

[tentimes]

Drumroll please

Oh Canada!

[EveryTime]

"List price" is often entirely fictional

Check the "List Price" of Amazon items at your next visit.

Some of the items have clearly exaggerated prices. Search for items over 70% off, and you'll find some truly absurd claims about original prices.

Even for items that don't claim a $1K list price, It's easy to find multiple listings for the same item, each with a different "list price".

[Anonymous Coward]

Amazon

Their international delivery fees are outrageous.

Amazon are waaaay too expensive.