Amazon Prime Day Features “Fake Sales,” According to Lawsuit

In a move that could cast a shadow over Amazon’s popular discount events, two consumers have filed a proposed class-action lawsuit alleging the e-commerce giant used deceptive pricing strategies during its summer Prime Day sale in July.

The lawsuit, filed in September in a federal court in Washington state, claims Amazon misled customers by advertising discounts based on inflated or “fictional” list prices, making deals appear more substantial than they actually were. Plaintiffs Cathy Armstrong of California and Oluwa Fosudo of Maryland detailed several examples of what they characterize as “fake sales” during the four-day event that ran July 8-11.

One example cited in the complaint involves a pair of headphones advertised as being 44% off a list price of $179.95. The plaintiffs contend that the item’s actual list price has historically ranged between $130 and $160, rendering the advertised discount misleading to consumers.

“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 complaint states, suggesting the company deliberately creates a false sense of urgency to drive sales.

The lawsuit details another instance involving an 8-inch Android tablet for children listed at “40% off” a purported original price of $119.99. According to the filing, in the 90 days before Prime Day, the tablet was available for between $50 and $85, with a median price of approximately $72. This means the “special” Prime Day price of $72.18 was actually higher than the $50 price point Amazon offered in April, and roughly equivalent to the item’s regular pricing on the platform.

The plaintiffs argue that Amazon’s alleged pricing tactics prevented them from making informed purchasing decisions. “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,” the complaint asserts.

The legal challenge emerged after Popular Information, a Substack newsletter focused on corporate and political accountability, published an investigation into Amazon’s Prime Day pricing practices. Attorneys representing the plaintiffs declined to comment when contacted, citing the ongoing litigation.

Amazon has not publicly responded to the allegations, declining to comment when approached about the lawsuit. On its corporate website, the company describes the July event as its “biggest Prime event to date” and claims customers “saved billions on deals.”

The timing of this lawsuit is particularly notable as Amazon just concluded another Prime Day event from October 7-8, its second major sale of the year. These discount events have become crucial revenue generators for the company, driving both sales and Prime membership signups.

This legal challenge comes at a challenging time for Amazon’s consumer practices. In September, the company agreed to pay $2.5 billion to settle Federal Trade Commission claims that it misled customers into signing up for Prime memberships and created deliberate obstacles to cancellation. The settlement included a $1 billion civil penalty, reportedly the largest ever imposed in an FTC rule violation case.

The lawsuit highlights growing scrutiny of retail pricing practices in e-commerce, where reference pricing—showing an original price alongside a sale price—can significantly influence consumer behavior. Consumer advocates have long argued that some retailers inflate original prices to create the illusion of deeper discounts, a practice that may violate consumer protection laws in many jurisdictions.

If the class action proceeds and proves successful, it could potentially impact how Amazon and other online retailers advertise discounts during promotional events, possibly leading to more transparent pricing practices across the e-commerce industry.