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FTC Sues Amazon Over Alleged Ad Price Manipulation, WSJ Reports
The U.S. Federal Trade Commission (FTC), along with more than 20 states, has filed a lawsuit against Amazon.com, according to court records. The suit alleges the company manipulated its advertising platform to the detriment of sellers, The Wall Street Journal reported earlier on Monday, citing FTC officials.
Details of the Allegations
The lawsuit claims that Amazon deceived advertisers by secretly raising the minimum price they had to pay to promote their products, the WSJ report stated. This alleged manipulation is said to have caused significant financial harm to advertisers on the platform.
According to the report, the financial impact on advertisers could amount to billions of dollars due to inflated ad prices. The states participating in the lawsuit may seek civil penalties and attempt to recover some of the money paid by affected businesses.
AdMarket Reaction and Context
Following the news, shares of Amazon (NASDAQ: AMZN) fell 3% in afternoon trading. This legal action represents another significant regulatory challenge for the technology and retail conglomerate.
The lawsuit follows a previous settlement in September of last year, in which Amazon agreed to pay $2.5 billion in fines and reimbursements to settle separate FTC allegations. That case involved claims the company had deceived customers into signing up for its Prime subscription service.
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