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OLYMPIA, Wash. - Washington is one of 22 states joining a Federal Trade Commission (FTC) lawsuit against Amazon, alleging the e-commerce giant has artificially inflated and misrepresented their ad prices.
The FTC filed the lawsuit on Monday, along with a coalition of 22 states, claiming that Amazon has "imposed undisclosed surcharges" on its advertising customers, many of which are small and medium-sized businesses. Advertising placements are sold in "second-price" auctions, Amazon maintains, based on bid amount and shopper search relevance.
The lawsuit alleges that Amazon has actually been misleading businesses, adding surcharges to ad prices while telling them they use "second-price" auctions. AGs suing Amazon assert this has been happening since 2019.
The AGs point to an internal memo sent in 2023, in which employees said this practice was not "doing the right thing for the advertisers."
FILE-The Amazon Lab126, a research and development company owned by Amazon.com, in Sunnyvale, California. David Paul Morris/Bloomberg via Getty Images
Amazon accused of misleading advertisers
"Many small business owners in Washington rely on Amazon for their livelihoods, and our office is committed to making sure Amazon treats them fairly, transparently, and in accordance with the law," said Washington AG Nick Brown.
Brown is suing Amazon for violating the state's Consumer Protection Act, and is asking the court to order the company to reform its practices and pay restitution, civil penalties and attorneys' fees.
Joining the FTC lawsuit are the attorneys general of Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina and Vermont.
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The Source: Information in this story comes from the Washington State Attorney General's Office.