Ankara: The US Federal Trade Commission (FTC) and 22 states have initiated legal action against Amazon, accusing the retail giant of secretly inflating prices in online search advertising auctions.

According to Anadolu Agency, the FTC disclosed that Amazon has been implementing these undisclosed surcharges for over seven years, impacting more than 1 million brands and sellers using the platform for advertising. FTC Chairman Andrew N. Ferguson highlighted the significant consequences of Amazon's actions, emphasizing that the increased costs have ultimately burdened American consumers.

The lawsuit alleges that Amazon misled advertisers by promising a second-price auction system, where winners would pay only one cent more than the next-highest bidder. However, it is claimed that in nearly 80% of cases, Amazon charged advertisers their own winning bid. This percentage reportedly rose from 30% to 40% in 2021 to about 80% by 2024.

Internal company documents unveiled that Amazon invented an auction participant to artificially raise prices, a strategy acknowledged by company executives as an effective revenue driver. The lawsuit further alleges that Amazon deliberately concealed these practices from the public to prevent backlash from its advertising clientele.

The FTC and the states have filed the complaint in the US District Court for the Western District of Washington, seeking to address these allegations against Amazon.