DistantNews
Support us
🇮🇱 Israel /Technology

FTC and 22 US states sue Amazon over allegedly illegal advertising practices

From Jerusalem Post · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

Newswire Official statement In the courts
  • The US Federal Trade Commission and 22 states sued Amazon, alleging that the company secretly inflated auction prices for product advertisements.
  • The FTC said advertisers may have paid at least $20 billion more as a result, while Amazon denied wrongdoing and said average cost per click remained flat from 2019 to 2024.
  • Amazon shares fell about 3% in afternoon trading, after the company faced a separate FTC settlement involving Prime subscriptions last year.

The Federal Trade Commission accused Amazon of quietly changing its advertising auctions to force sellers to pay more for product promotions, alleging that the practice cost advertisers $20 billion or more.

The FTC filed the lawsuit in federal court in the Western District of Washington with support from a bipartisan group of 22 US states. The agency said Amazon systematically raised the minimum prices required to place ads without informing advertisers. It alleged that the company generated billions of dollars in profits at the expense of customers using its auction-based advertising system.

The states could seek civil penalties and try to recover some of the money, according to the complaint. Amazon rejected the allegations in a blog post, saying its advertising policies are designed to show shoppers relevant ads. The company said the average cost per click stayed flat between 2019 and 2024, while sales generated by those clicks increased.

Amazon has been able to generate billions of dollars in profits, at the expense of its auction advertising customers.

— US Federal Trade CommissionThe agency used the statement in its lawsuit alleging that Amazon inflated advertising auction prices.

Amazon also said its pricing approach contradicted any suggestion of consumer harm. The company said it offers low prices across a broad selection and works to keep its retail and grocery prices at or below those of competing retailers.

Amazon shares fell about 3% in afternoon trading. Last September, the company agreed to pay $2.5 billion in fines and reimbursements to settle FTC allegations that it deceived customers into generating Prime subscriptions.

Amazon's approach to pricing contradicts any suggestion of consumer harm.

— AmazonThe company denied the FTC's allegations and defended its advertising and retail pricing policies.
About this summary

Originally published by Jerusalem Post in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

More Stories

From Our Blog