Amazon hit by lawsuit from FTC and 22 states claiming ad price rigging to the tune of $20 billion over seven years
- Amazon accused of creating fake auction participants to raise advertiser bids
- The number of advertisers paying more than anticipated doubled in three years
- Amazon argues the FTC's lawsuit is misguided and that its practices are normal
The Federal Trade Commission together with 22 US states has filed a lawsuit against Amazon, accusing it of manipulating its advertising auctions to make advertisers pay more.
According to the case, the practice affected more than one million brands and sellers, more than half of which were small and medium sized businesses.
This particular case centers around Sponsored Products, Sponsored Brands and Display/Sponsored Display advertising – ads that appear alongside Amazon's product search results where sellers bid for the most prominent positions to gain more exposure to potential customers.
According to the case, Amazon changed the mechanics of its bidding scheme without properly telling advertisers. Under the old model, winning bidders should have...
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