Amazons Sponsored Listings Might Be Swindling Buyers Per FTC Complaint

Amazon’s Sponsored Listings Might Be Swindling Buyers Per FTC Complaint

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The Strategic Organizing Center alleged in its FTC complaint that about 28 percent of all results on its platform were found to be third-party ads.

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Amazons Sponsored Listings Might Be Swindling Buyers Per FTC Complaint

Amazon has courted yet another controversy, and this one alleges the e-commerce titan of unlawful deception tactics by pushing a ton of sponsored product listings between organic search results and also making these ads difficult to discern. The company’s predicament smells a lot like what Google tried to do just over a year ago. The search giant proposed a redesign for the search results page in which genuine product listings started to look a lot like ads.

Google doesn’t make money when users click on a regular search result. However, it earns some dough when users click on an ad that is listed on its sprawling online real estate. By making ads look like regular search results, the chance of making money from ad clicks went up. Needles to say, the move received backlash from consumers, activists, politicians, as well as the press. Google eventually backtracked on the controversial design. But Google is not alone in doing so. A majority of online marketplaces insert ads or sponsored products between organic search results. Amazon is the best example, and unsurprisingly, it appears to have abused its dominance too.

As per a complaint filed before the US FTC by a coalition of labor unions called Strategic Organizing Center, Amazon deceived consumers visiting its marketplace by sneakily bombarding them with sponsored products without properly identifying them as such. The complaint cites unlawful deception tactics for online marketing covered under Section 5 of the Federal Trade Commission Act. The complaint accuses Amazon of deceiving millions of consumers by not disclosing “clearly and conspicuously” which search results are paid ads from those that appear organically in search results. Amazon, willingly or unwillingly, is not new to such malicious tactics. Earlier this year, another investigation revealed how some of its sellers were bribing customers to leave good reviews and employed other tactics to boost ratings.

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That’s why we are calling for the FTC to investigate Amazon and take swift and forceful action to prevent these deceptive advertising practices. Share this tweet if you agree! Read our full complaint to the FTC here: https://t.co/PODMQKUOwx

Yet Another Terrible Tango For Amazon

As part of its investigation, SOC combed through more than 130,000 Amazon product search results on desktop and mobile platforms. Of those product search results, about 28 percent were found to be third-party ads. It’s a huge number, but that’s not the only problem here. Interestingly, Amazon — alongside Apple — was just hit with a handsome $225 million fine for violating antitrust guidelines over the sale of Apple and Beats-branded products. FTC has issued specific guidelines that mandate online marketplaces to distinguish between ads and organic search results on a platform, which can be any visual identifier such as a color shading or a conspicuous banner or tag. SOC says “none of Amazon’s third-party paid ads” complied with all of the agency’s relevant guidelines.

Another damning study that was published weeks ago revealed that Amazon is also one of the biggest environmental polluters as well. SOC’s complaint further mentions that none of Amazon’s ads were visually distinct from organic search results by prominent use of shading. Plus, only an abysmal one percent of them had a prominent border, and about 61 percent of these ads were devoid of a large and visible label. In the light of the investigation, SOC has urged the FTC to investigate Amazon for deceptive advertising practices. Amazon has denied the allegations made by SOC in its complaint, with its spokesperson telling The Washington Post that it “always include a clear and prominent ‘sponsored’ label, implemented in accordance with FTC guidelines.”

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Link Source : https://screenrant.com/amazon-ads-sponsored-affiliate-ftc-complaint/

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