Amazon · FTC · California · New York · Ars Technica
The Federal Trade Commission and 22 states sued Amazon yesterday
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“Since 2019, Amazon.com, Inc. has secretly and systematically overcharged its approximately 1.2 million advertising customers by manipulating the ‘auctions’ that it uses to set the price of ads on its platform,” the lawsuit said.
Key facts
- Based on numerous internal documents describing its ‘hidden’ ‘surcharges,’ Amazon’s scheme has likely illegally extracted over $20 billion from its unwitting advertising customers,” according
- The FTC lawsuit was joined by a bipartisan group of 22 state attorneys general from Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland
- Amazon has run GSP auctions since 2012, but in 2019, it started adding an undisclosed surcharge that it internally calls a “soft reserve price,” causing advertisers to pay more than the price
- The Federal Trade Commission and 22 states sued Amazon yesterday, alleging that it has conducted a secret scheme to overcharge advertisers for seven years
Summary
The Federal Trade Commission and 22 states sued Amazon yesterday, alleging that it has conducted a secret scheme to overcharge advertisers for seven years. The FTC said it obtained internal documents and messages that reveal how Amazon secretly inflated auction prices for Sponsored Products, Sponsored Brands, and Sponsored Display advertisements that appear alongside results seen by consumers when they search for a product. “Based on numerous internal documents describing its ‘hidden’ ‘surcharges,’ Amazon’s scheme has likely illegally extracted over $20 billion from its unwitting advertising customers,” according to the lawsuit filed in US District Court for the Western District of Washington.