Why A New FTC Complaint Alleges Amazon Is Deceiving You
A complaint filed with the US Federal Trade Commission (FTC) accuses Amazon, the world's largest online retailer, of "unlawfully deceiving millions of consumers" by not appropriately highlighting paid advertisements in a fast enough manner when searching for a product. And it does this on more than a quarter of its search results, the complaint alleges.
These are the product listings that state "Sponsored" in small text when looking up a particular item. Otherwise, however, they appear the same as other product search results. This is one of the issues the complaint raises, stating that FTC guidelines call for advertisements to be distinguished by borders and/or shading, in addition to prominent text labels.
Beyond that, the complaint filed by the Strategic Organizing Center (SOC) alleges more sinister trickery on the part of Amazon. According to the complaint, Amazon deliberately engineered a delay in loading advertising labels on some products, a tactic called a "lazy load" that could result in a shopper clicking on a search result without realizing it's an advertisement rather than an organic product listing.
FTC complaint alleges Amazon intentionally makes ads look like organic listings when searching for a product
"SOC has found evidence that Amazon is systematically flouting FTC guidance for such disclosures, and in addition is deliberately obfuscating identification of a key category of advertisements by delaying their ad labels from loading for several seconds. Amazon’s pervasive violations of the FTC’s digital advertising guidelines clearly constitute unlawful deception," the complain alleges.
The coalition said it analyzed more than 130,000 product search results on both desktop and mobile, which led it to the conclusion that Amazon is "substantially or entirely out of compliance" with FTC's guidelines. In short, the complaint alleges that Amazon's ads deceive shoppers by appearing as organic listings, affecting millions of consumers on a daily basis.
In a statement provided to HotHardware, an Amazon spokesperson says the SOC's complaint is wrong about the FTC's guidance on these things, and that it is acting in the best interest of customers.
“We design our store to help customers discover products we think may best meet their needs—sponsored ads is one of the ways to help them find products they may be interested in. This report is incorrect and misstates FTC guidance—ads in Amazon’s store always include a clear and prominent ‘sponsored’ label, implemented in accordance with FTC guidelines," the spokesperson said.
You can read the full complaint (PDF) in which the SOC pitches for "aggressive action" by the FTC.