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Amazon is under investigation for inflating its prices

Peter Wynn Thompson / AP

The Federal Trade Commission is looking into claims that Amazon was deceptive about its pricing discounts, reports Reuters, citing a source close to the investigation. The probe, which was spurred by a complaint from the advocacy group Consumer Watchdog, is part of the FTC's review of Amazon's agreement to acquire Whole Foods.

In a letter to the FTC, the group alleged that Amazon had been inflating the list prices on roughly 46% of its products, making Amazon's prices look like a bargain. As a result, Consumer Watchdog asked the FTC to stop Amazon from purchasing Whole Foods while the deceptive pricing continued. Amazon hit back and said the conclusions the Consumer Watchdog reached from its analysis are "flat out wrong."

Why it matters: Critics argue that Amazon's agreement to buy Whole Foods would give the e-commerce giant an unfair advantage over competitors. While there isn't an obvious antitrust angle for blocking the acquisition, other red flags raised by critics, like this one, could slow down the review.