For release on March 25, 2021
Deputy District Attorney
Consumer Protection Unit
Amazon Pays $2 Million in Consumer Protection Settlement
E-commerce giant Amazon was ordered to pay $2 million to resolve a lawsuit brought by California district attorneys contending that Amazon used misleading price reference advertisements to sell products online.
Amazon commonly uses a reference price to show how much a consumer is saving. Consumers shopping online rely upon these reference prices that might, for example, offer a product for $9.99 with a reference price of “Was: $14.99” or “List Price: $17.99.”
Prosecutors investigated Amazon for violations of California law, which prohibits advertising a reference price that is false or misleading.
District Attorney Jeff Rosen said: “List prices must be clear and accurate, whether they are found on a mom-and-pop website or Amazon. People rely upon them to comparison shop and spend their hard-earned money.”
The Santa Clara County District Attorney’s Office worked with the District Attorney’s Offices of Alameda, Riverside, San Diego, Santa Cruz, and Yolo to investigate and file the civil enforcement action. The $2 million judgment includes civil penalties, investigation costs, and restitution to the state’s Consumer Protection Trust Fund, which provides resources for investigating, prosecuting, and enforcing consumer protection actions. The judgment was signed by the San Diego Superior Court on March 24, 2021.
The final Judgment requires Amazon to improve its disclosures about what it means by “Was” and “List” price and to explain how the reference price is determined.
Amazon cooperated with prosecutors to implement the changes, which will benefit not only California online shoppers but anyone visiting the site.