Lawsuit claims Amazon Prime Day is "rife with fake sales"

Two consumers allege that Amazon misled customers by promoting false discounts on its site during its summer Prime Day sale.

In a proposed class action lawsuit filed in September in a federal court in Washington state, plaintiffs Cathy Armstrong of California and Oluwa Fosudo of Maryland, claim that Amazon used "fictional" list prices to calculate its recent Prime Day percentage discounts, making deals appear better than they actually were.

The lawsuit details a number of examples of what plaintiffs refer to as "fake sales" during the four-day Prime Day event, which ran July 8-11.

One such example is a pair of headphones advertised by Amazon on Prime Day as being on sale for 44% off a list price of $179.95, according to the complaint. Plaintiffs, however, claim that the actual list price for the item has always been in the range of "$130 to $160," making the 44% Prime Day discount "inflated fiction."

"Amazon uses these fake Prime Day Percentage Discounts, offered under the extreme time pressure of the brief Prime Day window, to lure consumers to purchase products," the court filing states.

In another example, the lawsuit mentions an 8-inch Android tablet for kids listed as "40% off," based on a strikethrough list price of $119.99. However, in the 90 days leading up to the sale, the tablet was being offered between $50 and $85, with a median price of $72, according to the court filing. That means the supposedly time-limited Prime Day Deal of $72.18 was actually higher than the $50 price Amazon offered it for in April, and about the same price the tablet usually goes for on Amazon, the lawsuit states.

"But for Amazon's false and misleading representations, Plaintiffs would also have shopped around for better prices in the marketplace or waited to purchase the items at a better price," according to the complaint.

The lawyers who brought the suit on behalf of the plaintiffs declined to comment, citing the pending litigation.

They filed the proposed class action lawsuit after Popular Information, a Substack newsletter focused on corporate and political accountability, published a story calling out some of the allegedly deceptive tactics Amazon used during its Prime Day event.

Amazon declined to comment.

On its corporate website, the company calls the recent four-day sale its biggest Prime event to date, and states that customers "saved billions on deals." The e-commerce giant held a separate Prime Day event this week from Oct. 7-8.

Amazon in September agreed to pay $2.5 billion to settle federal claims it misled customers into signing up for Prime and made it difficult for them to cancel their membership. As part of the settlement, Amazon must pay a $1 billion civil penalty — the largest ever in an FTC rule violation case.