HARRISBURG, PA — Pennsylvania Attorney General Dave Sunday joined the Federal Trade Commission and 21 other state attorneys general in a federal lawsuit filed Aug. 31 accusing Amazon.com Inc. of secretly manipulating advertising auctions to inflate prices paid by more than 1 million brands and sellers, including Pennsylvania businesses.
The complaint alleges Amazon engaged in the practices for more than seven years and obtained tens of billions of dollars from advertising customers as a result. Pennsylvania is seeking restitution, penalties, costs and an injunction under the state’s Unfair Trade Practices and Consumer Protection Law.
At issue are auctions through which advertisers bid for Sponsored Product, Sponsored Brands and Display Ads appearing alongside product-search results on Amazon’s website and app. According to the complaint, Amazon allegedly overrode auction results and substituted higher prices to increase advertising revenue.
The lawsuit further alleges Amazon concealed the practice from advertisers, resulting in fees and surcharges that were ultimately passed along to consumers through higher product prices.
“Amazon secretly raised prices in auctions for advertisements on their website, preying on smaller businesses on tight budgets,” Sunday said. “We are hopeful that this lawsuit will provide restitution and relief for businesses purchasing ads on Amazon, and in turn, keep prices down for consumers.”
The Pennsylvania Attorney General’s Office said more than 14,000 independent sellers in the state sell over 100 million items annually through Amazon, including groceries, clothing and other goods. Those businesses are among the advertisers potentially affected by the alleged conduct.
The complaint was filed in the U.S. District Court for the Western District of Washington.
Pennsylvania joined the FTC and attorneys general from Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Rhode Island, South Carolina, Vermont and Washington in bringing the case.
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