The use of list prices online is at the heart of a case in a California Court of Appeal. Overstock.com, a popular online merchant, was found liable in a lower court for using misleading reference prices to exaggerate potential customer savings. It was fined $6.8 million, twice the size of the next-largest penalty for false advertising in California.

In its appeal, Overstock said it followed “standard industry practices” to come up with its reference prices. Internet retailers including Wayfair, Walmart, Rakuten (formerly Buy.com), Crate & Barrel and Williams-Sonoma employ list prices to varying degrees. Amazon, the biggest e-commerce player, uses them extensively and prominently.

If some Internet retailers have an expansive definition of list price, the Federal Trade Commission does not.

“To the extent that list or suggested retail prices do not in fact correspond to prices at which a substantial number of sales of the article in question are made, the advertisement of a reduction may mislead the consumer,” the Code of Federal Regulations states. The F.T.C. declined to comment.

“If you’re selling $15 pens for $7.50, but just about everybody else is also selling the pens for $7.50, then saying the list price is $15 is a lie,” said David C. Vladeck, the former director of the F.T.C.’s Bureau of Consumer Protection. “And if you’re doing this frequently, it’s a serious problem.”

All of the retailers declined to be interviewed, as did Le Creuset. Amazon pointed to a disclosure on its website where it says the list price can have many origins: It can be the price on the product itself, it can be the price suggested by the manufacturer or supplier, or it can be Amazon’s guess as to what the list price should be. The retailer also said its list prices “may or may not” represent the prevailing price “in every area on any particular day.”