FTC Prepares Lawsuit Against Amazon Over Ad Pricing Practices
The Federal Trade Commission (FTC) is reportedly planning to sue Amazon over its ad pricing practices, according to a Wall Street Journal report.
The FTC and a bipartisan group of more than 20 state attorneys general intend to file the lawsuit in Seattle federal court, accusing Amazon of manipulating what businesses paid to promote products and collecting tens of billions of dollars for itself over seven years.
Amazon allegedly used a 'soft reserve' practice, inserting its own bid above the runner-up in auctions, which increased the price merchants paid. The company's public advertiser page says it uses 'reserve pricing' that 'may affect the cost of your ad', but officials claim Amazon did not disclose this new practice.
The planned lawsuit would be the FTC's third major action against Amazon, following a $2.5 billion settlement last year over claims that Amazon misled shoppers into Prime and made cancellation difficult.