Amazon may be in trouble with the FTC for alleged sketchy practices toward advertisers, according to some of Bloomberg’s anonymous sources.
At issue, Bloomberg says, are possible undisclosed price floors, or “reserve pricing,” that might affect how much advertisers bid in order to make their products appear in search results.
If an allegation of not disclosing a price floor doesn’t sound all that devious at first (it didn’t for me), another Bloomberg report from last year about potential FTC investigations into both Amazon and Google describes this phenomenon in slightly more detail:
“Google sells search ads via automated auctions that take place in less than a second after a user enters a query. Amazon also hosts real-time auctions that place ads within its listings, sometimes known as ‘sponsored listings’ or ‘sponsored ads’ that users see when they search for specific products.
The FTC is seeking details about Amazon’s auctions and whether it disclosed ‘reserve pricing’ for some search ads — price floors that advertisers must meet before they can buy an ad, the people said.”
An invisible price floor for an automated ad auction may seem like it would just confuse a low bidder while not actually charging them money—no harm done. But, logically, the next step might be to up their bid. Meaning they would be bidding against no one in order to meet an invisible reserve from Amazon (allegedly), while thinking they’re bidding against a competitor. And Amazon might (allegedly) be raking in money off their confusion.
Amazon’s total ad revenue for 2025 was $68 billion—though that includes all ads, including video.
Bloomberg’s anonymous sources from the 2025 story also say the FTC probe is an offshoot of an earlier complaint saying Amazon allegedly “litters its marketplace with irrelevant search results,” which motivates sellers to become advertisers, simply to make their products show up when users search the relevant terms.
Perhaps not coincidentally, what Bloomberg is describing was part of Cory Doctorow’s original 2023 essay on the concept of enshittification:
“Search Amazon for ‘cat beds’ and the entire first screen is ads, including ads for products Amazon cloned from its own sellers, putting them out of business (third parties have to pay 45% in junk fees to Amazon, but Amazon doesn’t charge itself these fees). All told, the first five screens of results for ‘cat bed’ are 50% ads.
This is enshittification: surpluses are first directed to users; then, once they’re locked in, surpluses go to suppliers; then once they’re locked in, the surplus is handed to shareholders and the platform becomes a useless pile of sh*t.”
Bloomberg says the FTC action, in conjunction with attorneys general in multiple state may result in penalties totaling billions of dollars. A new complaint, Bloomberg’s sources say, has already been drafted. Amazon and the FTC declined Bloomberg’s requests for comment.
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