1 day ago
FTC and States Sue Amazon Over Hidden Ad Charges
The FTC and many states are accusing Amazon of making online advertising more expensive in secret.
Advertisers pay Amazon to show sponsored products to shoppers.
The FTC says Amazon changed its auction system so advertisers often paid their own bids instead of lower prices.
The agency says Amazon hid these changes from advertisers.
It claims the hidden charges caused advertisers to pay billions of dollars more.
The alleged changes were especially important during busy shopping periods such as Prime Day and Black Friday.
Amazon operates one of the largest digital advertising businesses in the world.
The article also says Amazon agreed to pay $2.5 billion over separate allegations about misleading people into Prime subscriptions.
The Federal Trade Commission and more than 20 states sued Amazon over alleged manipulation of digital advertising prices.
The complaint alleges Amazon secretly raised minimum prices and added hidden surcharges in its advertising auctions.
Advertisers may have incurred billions of dollars in additional costs, according to the allegations.
The FTC says advertisers believed they were participating in genuine second-price auctions while Amazon concealed pricing changes.
The article also says Amazon agreed to pay $2.5 billion in fines and reimbursements to settle separate allegations involving Prime subscriptions.
- Who
- The Federal Trade Commission and more than 20 states sued Amazon.
- What
- They allege that Amazon manipulated advertising auctions, secretly increased ad prices and used deceptive subscription practices.
- Where
- On Amazon’s digital advertising platform in the United States.
- When
- The complaint cites changes from 2021 through 2024, including during Prime Day and Black Friday; the article does not give the filing date.
- Why
- The FTC alleges Amazon concealed pricing changes to increase advertising revenue and separately misled consumers about Prime subscriptions.
Key facts
- Plaintiffs
- The Federal Trade Commission and more than 20 states
- Alleged conduct
- Secret increases to advertising prices and hidden surcharges in ad auctions
- Advertiser impact
- The complaint alleges billions of dollars in additional costs
- Auction pricing
- Advertisers paying their own bids allegedly rose from 30–40% in 2021 to 70% in 2022 and around 80% in 2024
- Amazon advertising revenue
- More than $68 billion last year, according to the article
- Separate Prime settlement
- Amazon agreed to pay $2.5 billion in fines and reimbursements to Prime subscribers
- Industry position
- Amazon’s digital advertising business is described as the world’s third-largest, behind Google and Meta
Quotes
FTC and 22 state plaintiffs
The federal regulator and state governments that filed the complaint against Amazon
“Amazon 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”
deccanchronicle.com
Rob Bonta
California attorney general and participant in the lawsuit
“has rigged billions of ad auctions.”
deccanchronicle.com
Sources
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