Six district attorney offices led by the San Diego District Attorney’s Consumer Protection Unit will share equally $1.9 million of a $2 million settlement derived from an Amazon pricing lawsuit with the remaining $100,000 allocated to a restitution fund.
District attorneys in San Diego, Santa Cruz, Alameda, Santa Clara, Yolo, and Riverside will receive close to $318,000 each to cover costs and penalties, according to a press release.
“It's hard to explain from a standpoint of legal fees,” said Steve Spinella, deputy district attorney with the San Diego County District Attorney’s office. “As public employees, we don't look at it quite like that. We understand that there are costs that are involved with the investigation, travel and things along those lines but civil penalties are obviously the issue.”
The prosecutors sued Amazon on March 21, alleging former, higher prices of items previously sold may be misleading and the price at which items are usually sold by others improperly disclosed that the reference price was not necessarily the prevailing market price or regular retail price for which the product could be purchased.
“Unless the consumer understands that the list price with the cross out through it, could be among the highest prices for which the item is available in the marketplace, that consumer doesn't have all the information the consumer may want to have in order to exercise their purchasing discretion,” Spinella told the Southern California Record.
The settlement order was signed by San Diego Superior Court Judge Katherine A. Bacal on March 24.
“The parties, having recognized the impossibility of identifying aggrieved consumers who suffered actual loss, the impracticality of providing direct restitution to said consumers, and that the disproportionate cost of making restitution to individual consumers would far exceed the benefits customers would gain, agree that defendants shall pay $100,000 restitution to the California Consumer Protection Fund," the order says.
Although the case was settled within three days of its filing, Spinella said a year-long negotiation preceding the settlement was impacted by COVID-19.
“The ability to meet with my team and discuss things was happening via Microsoft Teams and that was something new,” he said.
The settlement requires Amazon to make changes and revisions to its “List” and “Was” pricing disclosures to explain the way it determines and validates its reference prices.
“Amazon has agreed to have a hyperlink with regard to all its reference pricing and for the list price hyperlinks, it's going to explain precisely how list prices are verified at Amazon, and also indicate to the consumer that the list price may not necessarily be the price at which the item is commonly available,” Spinella added.