FTC accuses Amazon of running a ‘secret ad surcharge scheme’ in new
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…
Summary
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.
Positives
- The report adds a new data point to the technology market.
- The development may create new product, research, or competitive opportunities.
Risks & concerns
- Because businesses believed they’d only ever pay slightly more than the runner-up, they had an incentive to bid high, trusting the system would keep their actual costs in check.