Amazon Hit by Lawsuit From FTC and 22 States Claiming ad Price Rigging to the Tune of $20 Billion over Seven Years
The complaint says Amazon used undisclosed reserve prices that may have raised advertiser costs by as much as $20 billion over seven years.
- On Monday, the Federal Trade Commission and 22 states sued Amazon, alleging the company manipulated online advertising auctions through undisclosed reserve prices that artificially inflated costs for over a million brands.
- The lawsuit states Amazon's methods were spurred because "it was unhappy about how much revenue its advertising auctions were generating." The alleged scheme has reportedly netted the firm $20bn from advertising customers since 2019.
- While claiming to use second-price auctions, the complaint alleges Amazon charged its own winning bid nearly 80% of the time, bypassing the expected competitive pricing structure advertisers anticipated.
- Following the announcement on Monday, the company's shares closed 2.5% lower as Amazon called the suit "misguided," strongly disagreeing with allegations that it misled advertisers.
- The Federal Trade Commission is seeking monetary relief and civil penalties, having previously settled a $2.5bn case with Amazon last year over Prime subscription practices.
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Amazon faces FTC lawsuit over alleged $20 billion ad-rigging scheme
The FTC and 22 states sued Amazon, alleging a hidden ad-pricing scheme that overcharged businesses by tens of billions of dollars. The post Amazon faces FTC lawsuit over alleged $20 billion ad-rigging scheme appeared first on The American Bazaar.
Feds and 22 states sue Amazon, alleging deceptive advertising scheme • SC Daily Gazette
The Federal Trade Commission and attorneys general from 22 states sued Amazon Monday, claiming the online retail company used artificial bids to inflate costs for advertisers, bringing in tens of billions of dollars. The complaint alleges that Amazon used an “invented auction participant” to drive up prices for advertising placements and sponsored product spots on […]
Amazon faces $20 billion ad lawsuit as South African sellers pay for the same sponsored tools
Amazon is facing a US lawsuit alleging that it secretly increased advertising prices by more than $20 billion, raising questions for South African businesses paying to promote products on its marketplace.
The U.S. Federal Trade Commission (FTC) and attorneys general of 22 states have sued Amazon, accusing the platform of “covertly and systematically” manipulating rates for product ads. According to regulators, the giant was expected to generate more than $20 billion in additional revenue over seven years. The case affects about 1.2 million advertisers, including more than 500,000 small and medium-sized businesses. Amazon denies the allegations.
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