The news: The US Federal Trade Commission and multiple state attorneys general are investigating a potential complaint against Amazon alleging the company misled advertisers, per Bloomberg. The probe could lead to a lawsuit or settlement as soon as this summer.
The investigation focuses on Amazon’s real-time ad auctions and whether it adequately disclosed “reserve pricing”—the minimum price floor advertisers must meet before they can purchase an ad—on some search ads. Regulators are examining whether insufficient disclosure caused advertisers to effectively bid against themselves while believing they were competing with others, helping boost Amazon’s ad revenues.
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