The ad, which appeared on Amazon’s website, said: “Get your stuff fast. Unlimited free one-day delivery on all eligible orders. Try Amazon Prime free for one month: unlimited free one-day delivery…after your free trial, Amazon Prime is just £49/year”.
It sparked a complaint that the “free” claim was misleading because membership of Amazon Prime required payment for the subscription.
Amazon said it believed its use of the word “free” provided “clarity” to the customer regarding what benefits they would get for their £49 membership. One-day delivery usually costs between £3.95 and £7.99.
The online retailer added that it believed omitting the word “free” from the messaging would lead to “confusion” for the consumer, who would wonder whether there would be any charge payable for delivery.
The CAP Code states advertisers must not describe an element of a package as free if that element is included in the package price.
The Advertising Standards Authority ruled that the use of the word “free” was misleading because members had to pay £49 before they could redeem it – although the regulator noted Amazon’s intention was to make clear delivery was without charge.
The watchdog has banned the ad and told Amazon not to describe Prime’s one-day delivery benefits as “free” again.
Amazon’s UK financials were revealed for the first time this week after the parliamentary committee probing the company’s tax arrangements published them online. Usually Amazon does not split out UK earnings in its company results statements.
Amazon generated £3.35bn in UK sales before tax in 2011, with £2.9bn of that from amazon.co.uk and approximately £441m in revenue from subsidiaries such as LoveFilm. It made £74m in profit in the period.