Consumer Watchdog group prompts FTC probe
Consumer Watchdog asked the FTC to halt Amazon’s purchase of Whole Foods and argued that deceptive list prices make it like more of bargain than they are. The FTC will investigate the charges of deceptive advertising and assess the merger’s compliance with antitrust laws.
Amazon denies inflating prices and claims they “validate the reference prices provided by manufacturers, vendors and sellers against actual prices recently found across Amazon and other retailers.” A spokeswoman from the company said that Consumer Watchdog’s claims are “deeply flawed, based on incomplete data and improper assumptions.”
Amazon and Whole Foods merger will likely be unaffected
These claims that Amazon has deceived customers about discount prices aren’t likely to derail the company’s planned acquisition of Whole Foods Market for $13.7 billion. “This issue will have no effect on the merger review, because the nature of the problem is derived from different law,” Roger Noll, a Stanford University professor of economics, told Bloomberg BNA. “Whether Amazon violated consumer fraud law is unrelated to whether the acquisition of Whole Foods substantially reduces competition.”
FTC spokeswoman Betsy Lordan declined to comment on whether the agency is reviewing the company’s pricing practices. “As a matter of policy, the FTC does not confirm the existence of investigations, or comment on them,” she told Bloomberg BNA. The FTC has authority to prevent the company from engaging in deceptive pricing that would not ordinarily overlap legally with their authority in the merger inquiry.
Navigating through the FTC’s requirements can be complicated and costly. If you need legal representation in dealing with the FTC or another government agency, contact our experienced team of attorneys at Christensen & Jensen.