FTC accuses Amazon of running a ‘secret ad surcharge scheme’ in new lawsuit
Amazon is facing a new lawsuit from the Federal Trade Commission (FTC) and 22 states, which accuse the company of secretly charging businesses more for advertising on its platform. The lawsuit, filed Monday, claims Amazon spent more than seven years quietly increasing the prices advertisers paid through its online ad auctions.
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Key Facts
- Fact 1: Amazon is facing a new lawsuit from the Federal Trade Commission (FTC) and 22 states, which accuse the company of secretly charging businesses more for advertising on its platform.
- Fact 2: According to the complaint, the alleged practice affected more than 1 million brands and sellers and may have generated tens of billions of dollars in additional revenue for Amazon.
- Fact 3: The 22 states joining the FTC are Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington.
- Fact 4: According to the FTC, Amazon told more than 500,000 small and medium-sized businesses that it ran a “second-price” auction where the winning advertiser would pay just one cent more than the next-highest bid, rather than the full amount of their own bid.
Amazon is facing a new lawsuit from the Federal Trade Commission (FTC) and 22 states, which accuse the company of secretly charging businesses more for advertising on its platform. The lawsuit, filed Monday, claims Amazon spent more than seven years quietly increasing the prices advertisers paid through its online ad auctions.
According to the complaint, the alleged practice affected more than 1 million brands and sellers and may have generated tens of billions of dollars in additional revenue for Amazon. The 22 states joining the FTC are Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington. The lawsuit centers on Amazon’s Sponsored Products ads, Sponsored Brands ads, and Display ads that run alongside its search results.
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