Amazon Faces Lawsuit Over Alleged $27 Billion Advertising Scam
Amazon has been accused of overcharging its advertising customers through manipulated online auctions. The US Federal Trade Commission (FTC) and 22 states filed a lawsuit against Amazon, alleging that the company has been making $27 billion AUD from advertising customers since 2019. According to the complaint, Amazon overrides auction results with higher prices set by the company to increase profits.
In a statement, Amazon denied the allegations, saying it 'strongly disagrees' with the premise that it misled advertisers and called the suit 'misguided'. The FTC claims that this scheme has harmed customers as extra costs are passed onto shoppers. Amazon responded by stating that consumers are not suffering from higher prices due to its advertising practices.
The lawsuit also states that Amazon's methods were spurred because it was unhappy about how much revenue its advertising auctions were generating. Amazon hit back, saying the FTC 'fundamentally misunderstands how advertisers operate'. The company added that advertisers adjust bids based on real-world performance, not descriptions of auction mechanics.