FTC press release: FTC, States Sue Amazon Over Secret Ad Surcharge Scheme | Federal Trade Commission
Amazon blog statement: Amazon’s response to the FTC’s lawsuit regarding Sponsored Ads
This piece does a good job of clarifying that Amazon’s “customers” who have been (allegedly) harmed are Sellers–who might then be passing their advertising losses on to Amazon shoppers.
I was pretty tied up yesterday but there have been a couple posts about this on the NSFE as well.
At least one post there where the OP was actually SURPRISED by this.
On the other hand, I’m shocked that anyone would be surprised! Seems to fit the normal play book – make more money…
They must be new. I feel like @ASV_Vites has been warning us about this for years.
Here’s the actual complaint: https://www.ftc.gov/system/files/ftc_gov/pdf/AmazonAds-Complaint.pdf
And some excerpts:
To be clear, the FTC alleges that
- Amazon lured and duped Sellers into higher ad bids by publicly claiming that when the Seller wins the bid, they only pay one cent more than the next highest bidder (second price), no matter how much more their own bid was.
- In reality, Amazon was “closing the gap” between the two bids by charging hidden and undisclosed surcharge fees (soft reserve fees) to the winner (contrary to how Amazon promoted their bid process) that Amazon claimed in internal discussions would ensure that ad bids were more commensurate with “market value”.
- Further, Amazon intentionally hid this surcharge process from Sellers because they thought that disclosure would lead to lower bids…and less revenue (someone literally said “we are leaving money on the table”).
Where do we sign up for our refund?
You shouldn’t be drinking so early …
I’m drinking for different reasons.
Watching our bottom line vanish due to out of control Ad spending by our guy, fuel surcharges, increased freight to FBA, declining sales, increased stress and anxiety.
Good times!
Where’s that robin to peck my brain out?
This has been a tough year to compete. Sales are flat and profit is plummeting
The OP of that “Shrieking Horror Show” post isn’t new - like many, they’re just using a handle that we hadn’t seen before the NSFE’s advent; she’s also a member of SAS.
Our friend Steve has indeed been remarking on this sort of shenanigan for a long time, as has many another Sponsored Ads user (and some agencies, to boot); it’ll be interesting to see if Amazon suffers anything more than another mere hand-slap when this is finally adjudicated.
Ah! Then my apologies 
I was never of the impression that there was a real auction and that any information recommending a bid was based on fact.
This is the internet, and to actually provide actual accurate data would be heresy.
I guess the FTC has a different understanding. I wonder how far they might drive a quest for accuracy and honesty?
I stopped advertising on Etsy when they took control of the bids.
One must trust the company providing the advertising space, that stands to profit off you, bid only just enough for you, didn’t bid against you, didn’t have you bid against yourself to increase the bid, and didn’t just say this was what the winning bid should have been because money.
Yeah, the whole buy advertising where you have no real control over how much you’ll spend (you set a max per day and amazingly it is all gone every day) nor a way to prove your ad was even seen is completely on the up and up… sure it is.
This is our biggest problem, with advertising with ANYONE. No transparency at all ever. We used Woopra on our eCommerce WordPress websites.
We caught Google Gaming the System, shut that down and never looked back. Amazon advertising has the same issue no transparency, no way to hold them accountable for cheating the system.
We do one very small ad, and our ROAS ranges from 13 to 80. However, this product is a micro niche item. Frankly, it may not even need the ads since no one else sells it.
Of course they (Amazon) misleads advertisers, they make way more money selling adds to people that do not understand the difference between Sales and Revenue. Let alone calculating Profits from those items. To most CoGS and Overhead, are something to do with a flying train. It is that foreign to most Amazon sellers. IMO.
This is America, the quest for accuracy and honesty is probably directly/indirectely proportional to SuperPAC contributions. 
But, but … Amazon said that they’ve done nothing wrong, and this is all just a big misunderstanding. Don’t you trust them, after all the things they’ve done to – um, I mean, for – you?
Yup, yup. Fake news. Nothing to see here.
These are the states participating, as of now:
- Alaska,
- Arizona,
- California,
- Colorado,
- Florida,
- Idaho,
- Illinois,
- Indiana,
- Iowa,
- Kentucky,
- Louisiana,
- Maryland,
- Nebraska,
- New Jersey,
- New York,
- North Carolina,
- Oklahoma,
- Pennsylvania,
- Rhode Island,
- South Carolina,
- Vermont, and
- Washington
If you’re one of the “over 500,000 small- and medium-sized businesses” that has been affected but your state isn’t participating yet, it might be worthwhile to contact your state’s AG office. Especially if you have good, simple records (screenshots, spreadsheets, reports, etc) to back you up.