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Overstock.com fined by California judge

In this business litigation case, Overstock.com, an Internet-based retailer, has been charged with giving false and misleading prices of products. However, the company has now defended itself, according to a Feb. 21 report, and it claims that the pricing laws currently in place have become outdated because of the way e-commerce works and how fast prices change online. The company believes that consumers are aware of street, retail and list prices and how that affects their wallets.

The company, which is based in Salt Lake City, Utah, claims that it sells products below the retail price of manufacturers. The company compares its prices to the retail pricing available, showing consumers how much they are saving when buying online on Overstock.com. However, this isn't always truthful, according to a 2010 lawsuit.

A judge gave a tentative ruling on the case that could result in the company facing $6.4 million in fines and fees for misleading advertising, according to the news, if their appeal fails. This boils down to fines of $3,500 per day of false advertising between March 2006 and Sept. 2008. Additionally, the company could be charged $2,000 per day from Sept. 2008 until Sept. 2013.

One judge in the California Alameda County Superior Court reported that the company "routinely and systematically" used misleading and false prices to lure in consumers. Overstock.com's general counsel claims that Overstock's price comparisons are accurate, because they use the prices other competitors offer. The company is fighting the ruling, because it believes that with one million products on average, it would be a high burden to know all prices online. That means there could be others selling the items for less, even though Overstock.com claims to be the lowest price online.

Source: WDAY, "Overstock.com fined $6.4 million for false advertising" Susanna Kim, Feb. 21, 2014

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