Amazon ‘Free Shipping’ A Ruse, Class Action Claims

A lawsuit filed against internet giant Amazon claims the company encouraged third-party vendors to raise prices by the amount they would have charged for shipping, allowing the company to claim it was offering free shipping without taking the financial hit. Third-party vendors that use Amazon’s Fulfillment by Amazon are encouraged to make their products “Prime Eligible,” meaning they would qualify for free shipping to Amazon’s “Prime” customers, who pay an annual fee. But the participating vendors are also encouraged to inflate the costs of their products to cover the loss in shipping expenses, Prime customer and plaintiff Cemal Ekin says. The suit accuses Amazon of breach of contract and violations under the Washington Consumer Protection Act, and seeks damages for anyone who signed up for Prime service between October 2007 and February 2011.