The news: The US Federal Trade Commission and a bipartisan group of more than 20 state attorneys general filed a lawsuit accusing Amazon of deceiving advertisers about how it priced search ads.
The case follows a monthslong investigation into whether Amazon adequately disclosed “reserve pricing,” the minimum price floor advertisers must meet before they can purchase an ad. Regulators allege the lack of disclosure caused advertisers to effectively bid against themselves while believing they were competing with others, resulting in higher ad prices and helping boost Amazon’s ad revenues.
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