Lawsuit accuses Amazon of ‘fake’ Prime Day deals

(NEXSTAR) – Two people are suing Amazon, accusing the retail giant of advertising “fake sales” and misleading consumers during the company’s popular “Prime Day” events.

Amazon calls Prime Day a chance for members to get “some of the best deals from top brands,” but the lawsuit alleges that those deals are not always what they seem.

During the multi-day shopping events, some items are featured on the Amazon website with a red “Prime Day Deal” tag, along with the purported percentage discount off a price that is crossed out.

The lawsuit, filed in Washington state court, claims that Amazon calculates the sizable discounts by subtracting from an inflated list price, pointing to a pair of Shokz ear buds as an example of a “fictional” list price.

“For example, although the images … provide a ‘List Price’ of $179.95, that price has not been Amazon’s List Price for the pictured headphones for 90 days or more prior to the supposed Prime Day Deal,” the suit reads. “Instead, the ‘List Price’ on Amazon has always been much lower than $179.95, ranging from $130 to $160.”

In another instance, a kids’ tablet listed for 40% off of $119.99 in a Prime Day Deal ($72.28), had actually been sold for between $50 and $85 in the 90 days leading up to the sale, according to the lawsuit.

The plaintiffs, one from California and the other from Maryland, are accusing Amazon of “luring in” shoppers who “would also have shopped around for better prices in the marketplace or waited to purchase the items at a better price.”

When contacted by Nexstar, an Amazon spokesperson declined to comment on the lawsuit.

Amazon settles with FTC for $2.5B

The lawsuit follows a $2.5 billion settlement 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 Restore Online Shoppers’ Confidence Act, a 2010 law designed to ensure that people know what they’re being charged for online.

Amazon Prime provides subscribers with perks that include faster shipping, video streaming and discounts at Whole Foods for a fee of $139 annually, or $14.99 a month.

It’s a key and growing part of Amazon’s business, with more than 200 million members. In its latest financial report, the company reported in July that it booked more than $12 billion in net revenue for subscription services, a 12% increase from the same period last year. That figure includes annual and monthly fees associated with Prime memberships, as well as other subscription services such as its music and e-books platforms.

The FTC said Amazon deliberately made it difficult for customers to purchase an item without also subscribing to Prime. In some cases, consumers were presented with a button to complete their transactions — which did not clearly state it would also enroll them in Prime, the agency said.

Getting out of a subscription was often too complicated, and Amazon leadership slowed or rejected changes that would have made canceling easier, according to an FTC complaint.

Internally, Amazon called the process “Iliad,” a reference to the ancient Greek poem about the lengthy siege of Troy during the Trojan war. The process requires the customer to affirm on three pages their desire to cancel membership.

The FTC began looking into Amazon’s Prime subscription practices in 2021 during the first Trump administration, but the lawsuit was filed in 2023 under former FTC Chair Lina Khan, an antitrust expert who had been appointed by Biden.

The agency filed the case months before it submitted an antitrust lawsuit against the retail and technology company, accusing it of having monopolistic control over online markets.

The company admitted no wrongdoing in the case, which was first filed two years ago.

The Associated Press contributed to this report.