Amazon Accused of Secretly Charging Sellers Hundreds of Millions
Florida Attorney General James Uthmeier joined forces with the Federal Trade Commission and 21 state attorneys general to sue Amazon over alleged hidden advertising charges.
The lawsuit claims Amazon misled sellers about its advertising auctions, saying they were competing in fair 'second-price' auctions where the highest bidder pays just one cent more than the runner-up. However, internal company documents cited in court filings describe a practice that secretly tacked on surcharges and introduced fake participants to force bids higher.
This allegedly inflated ad fees caused small businesses and sellers to pass extra expenses along to shoppers, resulting in everyday consumer products carrying higher price tags as a direct result.
Nationwide, the alleged scheme extracted more than $20 billion from roughly 1.2 million advertisers, including 500,000 small- and medium-sized businesses.