US trade regulator and 22 states accuse Amazon of taking $20bn with secret surcharges
FTC alleges in lawsuit that online retailer ‘secretly and systematically overcharged’ advertisers for years
TL;DR
- The FTC and 22 states have sued Amazon for allegedly "secretly and systematically overcharging" advertisers.
- The lawsuit claims Amazon's practices led to higher costs for customers on essential goods.
- Regulators allege Amazon generated over $20 billion from "hidden surcharges" through an "ad-rigging scheme."
- Amazon's advertising business is a significant revenue source, reportedly generating over $68 billion annually.
- The suit states that 1.2 million advertising customers, including many small- and medium-sized businesses, have been overcharged since 2019.
- The FTC points to Amazon's "second-price auctions" system, suggesting Amazon secretly raised second-highest bids with its own "shill" bids.
- Amazon denies the allegations, calling the lawsuit "misguided" and "patently false."
- The lawsuit is a joint effort between federal government and states, including both conservative and liberal ones.
- Plaintiffs seek to bar Amazon from deceptive practices, pay civil penalties, and refund advertisers.