Paying for an ad on Amazon may not have worked the way sellers believed it did. The Federal Trade Commission sued the e-commerce giant, alleging Amazon misled advertisers through a deceptive auctioning system. An ad auction is the real-time competitive bidding process where businesses pay to place their products in front of shoppers; the FTC says Amazon described that process to buyers inaccurately.
The Federal Trade Commission is the U.S. agency that polices unfair and deceptive commercial practices. Its lawsuit targets how Amazon sold advertising placements and what the company told the businesses funding that market about how bidding and selection worked.
Here is what the allegation says in plain terms. Companies that paid to advertise on Amazon entered what they believed to be a fair, transparent auction. The FTC says what Amazon told them about how that auction operated was not accurate. The allegation centers on how the system was represented to buyers, according to the agency's complaint.
Amazon operates an e-commerce platform where businesses buy ad placements to reach customers. The auction system that determines which ads appear and where is now the subject of a formal federal complaint.
Amazon has not been found liable. A lawsuit is a legal accusation, not a verdict. The company will have the opportunity to contest the FTC's claims in federal court, and that process is now underway.