FTC: Amazon Boosted ‘Junk Ads’ for Quick Profit

A recently unredacted FTC complaint levels serious allegations against Amazon, accusing the retail giant of deceptive ad practices and using private messaging to dodge the discovery process.

Bloomberg reports that Amazon has come under fire from the FTC for allegedly doubling down on the number of low-quality advertisements, known as “junk ads,” it served to consumers in an effort to boost its profit margins. These ads, which the company itself had previously identified as “defects” due to their irrelevance to consumer searches, were reportedly increased under the directive of Amazon founder and former CEO, Jeff Bezos.

The FTC’s allegations suggest that this surge in advertisements not only lined Amazon’s pockets but also created a thorny shopping experience for consumers and a challenging marketplace for sellers. The regulatory body quoted Amazon executives, highlighting their aggressive stance on ad proliferation. One communication explains, “We’d be crazy not to” increase the number of advertisements shown to shoppers.

The latest allegations are part of the FTC’s complaint against Amazon that were previously redacted. Breitbart News has reported on the explosive allegations that were found in the original complaint.

Further complicating Amazon’s position is the accusation that the company engaged in secretive communication practices. The FTC claims that Amazon employees used the “disappearing message” feature on the messaging app Signal, leading to the destruction of over two years’ worth of internal communications. This action is seen as a potential obstruction to the federal antitrust probe.

According to the FTC, Amazon is willing to do practically anything to increase its profits. For example, the lawsuit alleges that the company’s “Project Nessie” manipulated the market to allow Amazon to line its pockets:

The latest allegations focus on a secretive algorithm, known internally as “Project Nessie,” which is now emerging as part of the lawsuit. Although Nessie may have other meanings to the Amazon executives that crafted the manipulation algorithm, it is popularly known as the name of the Loch Ness Monster.

The algorithm, as per sources familiar with the FTC’s complaint, was instrumental in bolstering Amazon’s profits across a wide variety of shopping categories. Not only did it serve to enhance Amazon’s financial gains, but it also inadvertently nudged competitors into elevating their prices, thereby imposing a financial burden on consumers. In scenarios where competitors abstained from matching Amazon’s prices, the algorithm astutely reverted the item to its original price.

 

Read more at Bloomberg here.

Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.