(NEXSTAR) – Two people have filed a lawsuit against Amazon, accusing the retail giant of advertising “fake sales” and misleading consumers during the company’s popular “Prime Day” events.
Amazon describes Prime Day as an opportunity for members to get “some of the best deals from the best brands,” but the lawsuit claims those deals aren’t always what they seem.
During multi-day shopping events, some items are displayed on Amazon’s website with a red “Prime Day Deal” tag, along with an alleged percentage discount off the price that was crossed out.
the lawsuitIt claims, filed in a Washington state court, that Amazon calculates deep discounts by subtracting from an inflated list price, pointing to a pair of Shokz earbuds as an example of a “fantasy” list price.
“For example, although the images… provide a ‘list price’ of $179.95, that price was not the Amazon list price for the headphones pictured for 90 or more days prior to the purported Prime Day deal,” the lawsuit said. “Instead, the list price on Amazon has always been well below $179.95, ranging from $130 to $160.”
In another case, a children’s tablet listed at a 40% discount from $119.99 in a Prime Day deal ($72.28) was actually sold for between $50 and $85 in the 90 days preceding the sale, according to the lawsuit.
The plaintiffs, one from California and the other from Maryland, accuse Amazon of “enticing” shoppers who “were also shopping for better prices in the market or waiting to purchase items at a better price.”
When Nexstar contacted an Amazon spokesperson, he declined to comment on the lawsuit.
Amazon reaches settlement with FTC for $2.5 billion
The lawsuit comes on the heels of a $2.5 billion settlement for Amazon agreed to In September after the Federal Trade Commission accused the company of tricking customers into signing up for Prime memberships and making it difficult to cancel them.
At the heart of the case is the Online Shopper Trust Restoration Act, a 2010 law designed to ensure people know what they’re being charged online.
Amazon Prime offers subscribers perks including faster shipping, streaming video, and discounts at Whole Foods for a fee of $139 per year, or $14.99 per month.
It’s a major and growing part of Amazon’s business, with more than 200 million members. The company said in its latest financial reportReported in JulyIt booked more than $12 billion in net subscription services revenue, an increase of 12% from the same period last year. This number includes the annual and monthly fees associated with Prime membership, as well as other subscription services such as music platforms and e-books.
The FTC said Amazon intentionally made it difficult for customers to buy an item without also subscribing to Prime. In some cases, consumers were offered a button to complete their transactions — which did not clearly state that it would also enroll them in Prime, the agency said.
Opting out of a subscription was often too complicated, and Amazon leadership slowed down or rejected changes that would have made canceling easier, according to the FTC complaint.
Internally, Amazon has dubbed the operation “The Iliad,” a reference to the ancient Greek poem about the long siege of Troy during the Trojan War. The process requires the customer to confirm their desire to cancel the membership in three pages.
The FTC began looking into Amazon Prime’s subscription practices in 2021 during the first Trump administration, but the lawsuit was filed in 2023 under an earlier ruling.Federal Trade Commission Chairwoman Lina Khanan antitrust expert appointed by Biden.
The agency filed the case months before it was submittedAntitrust lawsuitagainst the retail and technology company, accusing it of monopolistic controlVia online markets.
The company did not admit to any wrongdoing in the case, which was first filed two years ago.
The Associated Press contributed to this report.