Donald Trump’s FTC, joined by 22 states, sued Amazon on Monday, accusing the internet giant of secretly raising the minimum prices advertisers had to pay for ads.
\n\nThe Wall Street Journal reports that the complaint states the practice cost advertisers more than $20 billion and pushed up prices for consumers. It began in 2018, according to the filing, and touched ads that show up when shoppers search on Amazon and its mobile app, including Sponsored Products, Sponsored Brands and Sponsored Display placements.
\n\nAmazon’s ad auctions were supposed to work like most online ad systems: the winning bidder pays only slightly more than the second-highest bid. The FTC’s complaint spells out the math. If the top bid is $15 and the next-highest is $12, the winner should pay $12.01. But starting in 2018, the FTC says, Amazon began altering some of these auctions in a way it believed advertisers would not notice. Internally, the company called the new approach a “soft reserve” pricing system. Rather than charge just above the second-highest bid, Amazon set higher prices after an auction had already concluded. Employees called these “post-hoc pricing adjustments,” according to the complaint, which also quotes an internal acknowledgment that “[a]dvertisers may…
Original source: https://www.breitbart.com/tech/
