OAKLAND — Discount retailer Overstock.com has been slapped with a $6.8 million fine after the Alameda County Superior Court ruled the company violated California’s false advertising and unlawful business practices by telling consumers they were getting a bigger discount than they were receiving.

The decision was handed down Thursday following a lawsuit by eight California counties alleging the online merchandizer displayed higher original prices on products to give the perception of a bigger discount, according to the settlement.

The court ruled that Overstock.com displayed reference prices that weren’t based on actual, but similar products and commonly listed original prices based on the highest possible price in order to overstate the amount of savings consumers could get.

A phone call and email to the company Thursday afternoon was not immediately returned.

Overstock.com is based in Salt Lake City, Utah, and last year reported $1.3 billion in revenue. As part of the penalty, the company will have to more accurately display reference prices and make fuller disclosures to consumers.

Sonoma, Marin, Monterey, Napa, Santa Clara, Santa Cruz, and Shasta counties also participated in the lawsuit.

Contact Karina Ioffee at 650-576-9626. Follow her at Twitter.com/kioffee.