FTC alleges Amazon overcharged advertisers for years

The Federal Trade Commission and attorneys general from 22 states are suing Amazon, alleging that the tech giant secretly inflated the prices businesses paid to advertise products on its platforms.

The lawsuit, filed on Monday, Aug. 31, alleges that Amazon used hidden surcharges in its online advertising auctions for more than seven years, potentially extracting tens of billions of dollars from more than 1 million advertisers. More than 500,000 of those advertisers were small and midsize businesses, according to the FTC.

The case centers on ads that appear alongside Amazon search results, including sponsored products, sponsored brands and display ads. The FTC alleges Amazon told advertisers they were participating in "second-price" auctions, but secretly changed its pricing system in 2019 in a way that allowed the company to charge more.

In a statement on its website, Amazon disputes the allegations and says its current advertising system has saved advertisers billions of dollars. The company also called the lawsuit "misguided" and said it plans to defend its practices in court.

According to the FTC's complaint, Amazon told advertisers that the winner of an ad auction would generally pay just enough to beat the next-highest bidder. For example, if one company bid…

Original source: https://www.usatoday.com/money/