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FTC Complaint Alleges Amazon Deceived Buyers With Ads In Plain Sight

FTC Complaint Alleges Amazon Deceived Buyers With Ads In Plain Sight
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The Center for Strategic Regulation claimed in its complaint to the Federal Trade Commission (FTC) that about 28 percent of all results on its platform were found to be third-party advertisements.

Amazon Another controversy sparked, this scam the e-commerce giant claims to illegally scam tactics by pushing a large number of sponsored product listings among organic search results and also making these ads hard to distinguish. The company’s predicament smells very much like what Google tried to do just over a year ago. The search giant suggested redesigning the search results page as the original product listings began to look a lot like ads.

Google does not earn money when users click on a normal search result. However, it earns some dough when users click on an ad listed in its sprawling online real estate. By making ads look like regular search results, you increase the chance of making money from ad clicks. It is desirable to say that the move received backlash from consumers, activists, politicians as well as the press. Google eventually retracted the controversial design. But Google is not alone in doing this. Most online marketplaces include ads or sponsored products among the organic search results. Amazon is the best example, and unsurprisingly it appears to have abused its dominance as well.

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According to a complaint filed with the US Federal Trade Commission by a coalition of labor unions called the Center for Strategic Organization, Amazon deceived consumers who visit its market by covertly bombarding them with sponsored products without properly identifying them as such. The complaint cites the illegal Internet marketing deception tactics covered under Section 5 of the Federal Trade Commission Act. The complaint accuses Amazon of deceiving millions of consumers by not disclosingclearly and visibly“And search results are paid ads than those that appear naturally in search results. Amazon, willingly or unwillingly, is not new to such malicious tactics. Earlier this year, another investigation revealed how some Their sellers bribe customers to leave good ratings and use other tactics to increase ratings.


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As part of the investigation, SOC combed through more than 130,000 search results for Amazon products on both desktop and mobile platforms. Among these product search results, about 28 percent of third-party ads are found. It’s a huge number, but that’s not the only problem here. Interestingly, Amazon – along with Apple – has just been fined a whopping $225 million for violating antitrust guidelines on the sale of Apple and Beats-branded products. The FTC has issued specific guidelines requiring online marketplaces to distinguish between ads and organic search results on the platform, which can be any visual identifier such as color shading, a banner or a clear sign. SOC . says “No Paid Third Party Amazon Ads” Comply with all relevant agency guidelines.


Another compelling study published weeks ago revealed that the Amazon is also one of the biggest environmental pollutants. The SOC complaint also notes that none of Amazon’s ads were visually distinct from organic search results through the prominent use of shading. In addition, only one percent of them had a prominent border, and about 61 percent of these ads were free from a large, visible poster. In light of the investigation, the SOC urged the Federal Trade Commission (FTC) to investigate Amazon over deceptive advertising practices. Amazon denied the allegations made by the SoC in its complaint, and its spokesperson said Washington Post They “always include a clear and prominent sponsored ‘mark, and are implemented in accordance with Federal Trade Commission guidelines’.”


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Sources: SOC, The Washington Post

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