FTC Targets Amazon with Multibillion-Dollar Deceptive Advertising Suit
The Federal Trade Commission (FTC) plans to sue Amazon over alleged deceptive advertising practices. According to reports, officials will file a complaint on Monday, accusing Amazon of quietly raising the minimum price sellers paid for ads on its store.
The practice earned Amazon tens of billions of dollars over seven years, with more than 20 state attorneys general joining in the complaint. Investors reacted quickly, sending Amazon shares down by 3% on Monday afternoon, erasing roughly $86 billion in market value.
Auction-style bidding on ads was a key aspect of Amazon's system. Sellers would bid against each other every time a shopper searched, but officials say that Amazon began placing its own bid in 2018, just above the runner-up, causing winners to pay more.