This Week In Blunders – Aug. 30-Sept. 5
“The table is tilted, folks. The game is rigged and nobody seems to notice.” – George Carlin
Amazon owns the store. It controls the shelves. It decides which products you see first. And it sells some of the best spots on those shelves to the highest bidder.
Now the government says Amazon was secretly bidding against its own advertisers.
The Federal Trade Commission and 22 states sued Amazon this week, alleging the e-commerce giant rigged its advertising auctions to squeeze tens of billions of additional dollars from businesses selling products on its site.
“When one of the world’s largest online retailers engages in unfair and deceptive conduct, the impact can be staggering,” said FTC Chairman Andrew Ferguson. “Amazon has millions of advertising customers who were misled into paying significantly higher prices. These higher costs were largely passed on to American consumers.”
Amazon denies the allegations, calling the case “misguided” and “patently false.” Now the courts will sort it out.
The complaint lays out how the alleged racket worked. Search Amazon for anything you want and many of the first products you see are “sponsored.”
Sellers bid for those spots in auctions that Amazon said were competitive. Amazon promised the winner would pay just a penny more than the next-highest bidder. But sometimes there was no next-highest bidder.
