FTC sues Amazon, accusing the e-commerce giant of misleading advertisers
The FTC sued Amazon, alleging the company misled advertisers through a deceptive auctioning system.
The complaint, which was filed in U.S. District Court for the Western District of Washington, centers on Amazon's sponsored products ads, brands ads and display ads that run alongside search results on its sprawling webstore.
The FTC alleges in its complaint that Amazon in 2019 changed its auction rules without notice by adding an undisclosed surcharge it referred to as a "soft reserve price," which led to higher ad prices.
In one exchange, a company executive allegedly acknowledged it uses an "invented auction participant" to increase prices, the FTC said.
The FTC and the states alleged Amazon's practices violate federal and state consumer protection laws, and they're seeking civil penalties, restitution and other unspecified damages.
It marks the latest example of Amazon being caught in the FTC's crosshairs. Last September, Amazon reached a $2.5 billion settlement with the agency to resolve a separate probe into its Prime membership program.
The company is also expected to head to trial next year in a case brought by the FTC and 17 states that accuses it of wielding its "monopoly power" to inflate prices, squash third-party sellers and degrade quality for shoppers. Amazon has denied any wrongdoing.
