The FTC sues Amazon over alleged $20 billion scheme to raise marketplace ad prices
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What just happened? Amazon's ad business is under fresh scrutiny over how it priced ads sold to merchants on its marketplace. The Federal Trade Commission and 22 states sued Amazon on Monday, accusing the company of making undisclosed changes to its ad-auction system that caused advertisers to pay more than they expected. The lawsuit says the practice affected about 1.2 million advertisers and generated more than $20 billion in additional charges.
The case involves Sponsored Products, Sponsored Brands, and Sponsored Display ads, which appear in search results and on product pages across Amazon's website and app. Sellers use these ads to put their products in front of shoppers who are already searching for similar items.
Amazon typically sells those ads through an auction. Under the standard second-price model described in the lawsuit, the...
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