Amazon could face civil penalties as the US Federal Trade Commission (FTC) considers filing a lawsuit over allegations that the e-commerce giant misled advertisers, according to a Bloomberg News report citing people familiar with the matter.
The possible complaint is part of an ongoing investigation by the FTC’s consumer protection unit, with several state attorneys general also participating. A decision on whether to pursue litigation or reach a settlement could come as early as this summer.
The probe centres on whether Amazon adequately disclosed advertising terms and pricing to businesses placing ads on its platform. The FTC is reportedly seeking information on Amazon’s advertising auctions and whether the company properly informed advertisers about “reserve pricing” for certain search advertisements.
Reserve pricing refers to the minimum amount advertisers must be willing to pay before an ad placement can be secured.
The investigation also extends to Google, with Reuters reporting last year that regulators were examining whether both companies had misled advertisers regarding advertising costs and conditions.
The FTC declined to comment on the Bloomberg report, while Amazon did not immediately respond to Reuters’ request for comment.
The latest scrutiny comes less than a year after Amazon agreed in September to pay US$2.5 billion in fines and reimbursements to Prime subscribers to resolve separate FTC allegations that the company used deceptive practices to drive subscription sign-ups.
The outcome of the current probe could determine whether Amazon faces another major regulatory challenge in the United States.
Reuters
