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UK Punishes Amazon.com, Inc. (AMZN) For Misleading Customers

Amazon.com Inc (NASDAQ:AMZN)

The UK’s Advertising Standards Authority (ASA) has decided to ban two delivery ads of Amazon.com, Inc. for misleading customers. The authority found that the two ads – offering ‘free UK delivery’ for orders of more than £20 – were unclear and misleading to customers, according to a report published on Marketing Week.

Amazon.com Inc (NASDAQ:AMZN)

Misleading Ads

According to the report, the ads – seen in July 2015 – were related to the delivery charges for an electronic product sold by AmazonBasics. The U.S. e-commerce giant, according to the complainant, didn’t clarify which item would be available for UK delivery. They also said that the company failed to make the delivery charges clear.

In response, Amazon said that delivery charge depends on a number of factors, including whether the items would be shipped by Amazon, a Marketplace seller or a combination of the two. Hence, it’s impossible to mention the specific charge on product pages.

The company also said that there are some other factors that impact ads including the total weight of the products, the type of products and whether the customer had reached the £20 minimum spend required on “eligible items.”

Last year, Amazon faced a fine from the ASA for its ad on Amazon Prime. The ad claimed that customers could enjoy the premium service for free for 30 days. Many were shocked to see that the company pocketed £79 after the 30 days. Customers said that the ad hadn’t made clear that there would be an automatic renewal.

Two months ago, the U.S. Federal Aviation Administration imposed a $35,000 fine on Amazon.com, Inc. for violating the Hazardous Materials Regulations. The agency said that that nine UPS employees were injured in October 2014 while handling a shipment package from the online retailer. The package contained Amazing! LIQUID FIRE, a corrosive drain cleaner for transportation. The shipment wasn’t properly packaged and wasn’t accompanied by a Shipper’s Declaration for Dangerous Goods, according to the agency.

From February 2013 to September 2015, the online retailer was found to have violated the Hazardous Materials Regulations 24 other times, according to the FAA.

Amazon’s Reason Wasn’t Enough

The ASA did not accept Amazon’s statement related to the delivery charges and has decided to ban the two ads.

“We considered that both the search listing and product page made clear that consumers who wished to purchase the product would be charged for delivery unless their order met certain criteria, though we noted that neither the search listing nor the product page stated the delivery charge for the product,” the authority said in a statement.

The most concerning thing to the ASA was that customers can see the delivery charge only after adding the product to their basket and that the delivery charge might affect whether the customer buys from a different seller.

“We concluded the ads did not make sufficiently clear which items were eligible for free delivery, and under what terms, and that they were therefore misleading,” the regulator said.

The ASA states that the ads must not appear again in the form complained about. Also, Amazon.com, Inc. must ensure that the ad featuring the product include the delivery charge alongside the price of the product.

“We also told them to ensure that, where items were eligible for free delivery, the claims used to communicate that did not mislead consumers as to the terms under which their order would qualify for free delivery. We also told them to ensure that qualifications to the offers of free delivery clarified, rather than contradicted, the claims they were intended to qualify,” the ASA states.

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