Canada fines Amazon seven hours of profit for false advertising

$840,000 punishment isn't even a tap on the wrist

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 was submitted by the manufacturers and bore no relation to actual prices people could find, making Amazon prices look way better than they actually were.

Amazon.ca agreed to pay a million Canadian-dollar fine to settle the case, and threw in 100,000 bucks for the CB's costs. The agency said the penalty "sends a clear message to the marketplace that unsubstantiated savings claims will not be tolerated."

"Consumers are naturally attracted to claims that they will save money. We're pleased that Amazon has put procedures in place to validate list prices received from its suppliers," said John Pecman, Commissioner of Competition.

"This ensures that consumers are provided with accurate information and not misled by savings claims. This agreement was reached through collaborative efforts and reflects an innovative approach we call shared compliance."

While it all sounds impressive, Amazon isn't going to be too pissed off. In its latest quarter, Q3 2016, the internet monster banked US$252m in net income. So, that CAN$1.1m fine and legal bill amounts to US$840,000, or about seven hours of global profit for the three-month period.

The ruling does at least mean that Canadians will get slightly more realistic price comparisons, but the deal doesn't cover anyone else in the world. As ever, caveat emptor. ®

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