A subsidiary of Amazon.com Inc. has been named in a class action lawsuit accusing the company of encouraging third-party vendors to raise the prices of their products by the amount they would have charged for shipping and deceiving customers into believing they were receiving free shipping.
In his lawsuit, plaintiff Cemal Ekin says he paid $79 per year for an Amazon Prime membership mainly to obtain free shipping. However, he says that third-party vendors are told to raise their prices to cover shipping costs, causing Prime members to pay inflated prices for products despite Amazon’s free shipping guarantee.
Ekin says Amazon encourages Fulfillment by Amazon FBA vendors to list items for sale as Prime Eligible. However, Ekin alleges “Amazon advised FBA Vendors to include the amount they would have charged for shipping in their item prices in order to maximize total revenue and profit margins.” Ekin claims that “Amazon disguised this price increase by giving priority to FBA Vendors, showing their items first in the results of a Prime Member’s product search.”
Ekin argues that Amazon’s practice breaches its contract with Prime members and is contrary to Federal Trade Commission (FTC) guidelines. The case is Dr. A. Cemal Ekin vs. Amazon Services LLC, case number 2:14-cv-00244, in the U.S. District Court for the Western District of Washington.