Amazon Sued by FTC Over Alleged Ad Auction Manipulation Scandal

The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, accusing the company of deceptive advertising practices. The FTC claims that Amazon's ad auction system misled over 1.2 million advertisers, including more than 500,000 small- and medium-sized businesses.

The lawsuit alleges that Amazon manipulated its 'second-price' auction model to impose hidden surcharges, effectively converting it into a first-price auction. This practice allegedly forced advertisers to pay significantly more, with costs passed on to consumers through higher product prices.

Amazon's advertising business has grown rapidly, becoming the third-largest online advertising marketplace behind Google and Meta. The FTC claims that Amazon's actions have violated fair trade practices, impacting millions of advertising customers and consumers alike.