Amazon could face billions in fines as the FTC eyes its ad business
Amazon’s advertising business has become its quiet money machine. It may also be its next big regulatory headache. The US Federal Trade Commission has drafted a potential complaint accusing Amazon of misleading advertisers, a case that could lead to billions of dollars in civil penalties, Bloomberg reported on 16 June, citing people familiar with the […] This story continues at The Next Web
No complaint has been filed. The FTC and Amazon both declined to comment, and the report rests on anonymous sources, so it is best read as a signal of where the regulator is heading rather than a done deal.
The investigation centres on whether Amazon properly disclosed the terms and pricing of its ads, the ‘sponsored listings’ that sit at the top of search results when you look for a product.
It is a technical point with a simple result, more ad spend flowing to Amazon. The regulator is examining Google over similar auction concerns.
Here is the part that turns a probe into a billion-dollar risk. The FTC’s own ability to extract cash penalties is limited, but Bloomberg reports that multiple state attorneys general are involved.
State consumer-protection laws allow fines of tens of thousands of dollars per violation, per day. Multiplied across the sheer number of ads Amazon serves, those figures climb fast, which is how the ‘billions’ estimate is reached.
The agency could wrap up the matter as soon as this summer, by lawsuit or settlement, though its two Republican commissioners, Andrew Ferguson and Mark Meador, would have to vote first.
An ad case would be a third front. For now it is a drafted complaint and an unnamed-source report, but it points squarely at the business Amazon can least afford to have disrupted.
