Congressional Democrats want scrutiny of Amazon-Whole Foods deal

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Feds Looking Into Allegations Amazon Misleads Customers

That report looked at listings for 4,000 products and found that in almost 40% of cases, the prices displayed were using reference prices out of whack with everyone else.

The Federal Trade Commission is looking into a complaint by the advocacy group Consumer Watchdog that Amazon.com AMZN misleads customers about its pricing discounts.

"In other words, in almost four in 10 cases, Amazon never appeared to charge the previous price from which it claimed to be discounting", the group wrote in July".

A source close to the probe says that while the FTC is looking into the Consumer Watchdog claims, it's not yet known whether or not a formal investigation will come of it.

The online retailer's bid for the organic grocery store chain is subject to approval by Whole Foods shareholders, as well as review by the Justice Department and FTC, which examine large mergers that might affect commerce in the United States.

"The conclusions the Consumer Watchdog group reached are flat out wrong", the company said in the statement. If that reference is made up, or the item never actually sells for that price, you can land yourself in some legal trouble.

The FTC has previously settled cases with other tech companies, including Apple and Google.

Consumer Watchdog, which analyzed 1,000 items sold on Amazon, said the retailer often employs "previous" prices, which it alleges are created to give the appearance of big discounts. However, Consumer Watchdog said the site hadn't charged more than $14.99 for the lightbulbs in the previous 90 days.

But if Amazon is successful in its plans to buy Whole Foods for $13.7 billion and continue growing into the world's only marketplace, does price competition even matter? On average, the Amazon reference overstated the median market prices by $22, or about 20 percent.

Amazon ran afoul of the FTC in 2014 for making it too easy for children to run up bills while playing games such as "Pet Shop Story" and "Ice Age Village" on mobile devices, resulting in an estimated $86 million of unauthorized charges.

Consumer Watchdog said on its website that Amazon is deceiving its customers by putting fake crossed-out prices next to its products.

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