Amazon Caught Rigging Its Own Ad Auctions for Extra Cash
The FTC just dropped the hammer on Amazon, and it turns out the marketplace might be playing a dirty game with search ads.
So, the FTC and a massive squad of states are calling out Amazon for running a rigged casino in their own search results. They claim Amazon promised advertisers a fair auction, but instead, they were secretly gaming the system to squeeze more money out of sellers.
The setup was supposed to be a second-price auction, where you pay just a cent more than the guy below you. Instead, Amazon allegedly switched to a first-price model on the fly, forcing sellers to pay their full max bid nearly 80% of the time. They even used an internal "invented participant" to shill-bid against real advertisers just to hike up the costs.
Internal documents show they basically admitted to charging prices that real competition never would have allowed. It is wild to think the house wasn't just winning—the house was literally cheating while charging a cover fee.
Apparently, the most profitable way to run an online mall is to secretly become the biggest bully in the building.
Source: Amazon
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