Amazon Accused of Secretly Inflating Online Ad Prices

The US Federal Trade Commission (FTC) and 22 states have filed a lawsuit against Amazon, accusing the company of secretly inflating prices in online search advertising auctions.

The FTC claims that Amazon increased prices for over seven years without disclosing the changes to advertisers. This allegedly affected more than 1 million brands and sellers who advertised on the platform.

FTC Chairman Andrew N. Ferguson stated that Amazon's deceptive conduct had 'staggering impacts' on American consumers, as higher costs were eventually passed on to them.

The lawsuit claims that Amazon promised advertisers a second-price auction system, where winners would pay only one cent more than the next-highest bidder. However, internal documents revealed that the company charged Sponsored Products advertisers their own winning bid close to 80% of the time.