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ARTICLE · 12 APRIL 2021

Amazon Pays $2 Million To Settle Reference Price Allegations

Kelley Drye & Warren LLP
Kelley Drye & Warren LLP
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Kelley Drye & Warren LLP

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Shortly after the state of California filed a lawsuit against Amazon alleging deceptive prices, Amazon agreed to pay $2 million in penalties and restitution.

United StatesMedia, Telecoms, IT, Entertainment
Christie Grymes Thompson
Christie Grymes Thompson
Kaelyne Wietelman
Kaelyne Wietelman

Shortly after the state of California filed a lawsuit against Amazon alleging deceptive prices, Amazon agreed to pay $2 million in penalties and restitution.

Under the stipulated judgment, Amazon is restrained from using an advertised reference price based on a formula, algorithm, or other method that produces misleading or false results until April 1, 2024. Amazon cannot advertise a reference price unless it provides:

(1) a clear and conspicuous hyperlink to a clear and exact definition of the term; and,

(2) the definition includes a statement that the reference price may not be the prevailing market price or regular retail price.

Amazon is required to pay $100,00 in cy pres restitution, $1,700,000 in civil penalties, and $200,000 to the Riverside County District Attorney's Office. Amazon's settlement is a good indication for what state enforcers are interested in when it comes to reference prices. Under California law, reference prices must reflect the

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