Amazon settles lawsuit with San Diego, other counties over price listings

SAN DIEGO (CNS) - Amazon.com settled a lawsuit with San Diego County and five other counties over pricing irregularities, it was announced Thursday, agreeing to pay $2 million in penalties and restitution, as well as change its online listings to eliminate confusion about the actual cost of products.

The complaint filed last week in San Diego Superior Court alleged that the e-commerce giant's use of "reference pricing" in some of its online advertisements was either misleading or potentially misleading. The complaint pointed to the use of "Was" or "List" prices on the website, which advertise savings to consumers and routinely have strike-through lines across them.

A "Was" price is the price at which Amazon previously offered the product. "List" price advertisements suggest to consumers the price at which the product is commonly offered or sold by another seller, supplier or the product's manufacturer.

Prosecutors said "there were issues with how Amazon determined these reference prices and whether words like 'Was' or 'List' were used in a manner

that was misleading to consumers."

The San Diego District Attorney's Office was joined in the complaint by the district attorney's offices in Riverside, Alameda, Santa Clara, Santa Cruz and Yolo counties.

In addition to the monetary penalties, the stipulated judgment reached Wednesday requires Amazon to make revisions to its pricing disclosures,

which includes providing hyperlinks on its site that give consumers "clear definitions of the meaning of 'Was' and 'List' price advertisements, so they understand the nature of the advertised savings."

The DA's Office statement said Amazon "worked promptly and cooperatively throughout the district attorneys' investigation and has already implemented changes to its website and pricing algorithms consistent with the final judgment."

Amazon also issued a statement, saying: "Amazon has always provided clear and accurate pricing information on our product pages, and we have made improvements to how we describe the pricing information we provide to make it even clearer for customers."

The company included a link that elaborates on reference pricing at, available at http://www.amazon.com/gp/help/customer/display.html?nodeId=GQ6B6RH72AX8D2TD.

San Diego County District Attorney Summer Stephan said that when consumers shop online, "they need to be able to trust that when a product is advertised as being a bargain, it truly is. This judgment should remind retailers that the law requires them to provide accurate information consumers can make informed purchasing decisions.

"Our Consumer Protection Unit continues to hold companies accountable and collaborate successfully with our prosecution partners across the state of California," she added.