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Consumer group asks FTC to investigate Amazon's paid endorsements program

Consumer group asks FTC to investigate Amazon's paid endorsements program
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Leading consumer group Public Citizen on Tuesday asked federal regulators to probe whether Amazon associates misled and deceived customers by failing to disclose they receive money to recommend certain products.

According to the complaint with the Federal Trade Commission (FTC), multiple participants in Amazon's "associates" program — which allows individuals and businesses to make money for promoting products on Amazon — published Amazon product recommendations without adequately disclosing their business relationship during the company's annual Prime Day 48-hour sale last week.

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"Leading up to and through Amazon Prime Day on July 15-16, Americans’ email inboxes were stuffed with recommendations for Amazon Prime Day best buys, their Instagram feed replete with suggestions of what to buy on Amazon, their internet and blog reading lists overflowing with pointers for the best deals," Public Citizen President Robert Weissman wrote in the complaint, addressed to the FTC's consumer protection bureau chiefs.

"Some substantial portion of this publicity and recommendations for Amazon Prime Day were paid endorsements, but in a great number of cases, the endorsement relationship was either not disclosed to consumers or was communicated with inadequate disclosures," the group wrote.

Public Citizen is asking the FTC to look into the issue further and potentially push Amazon to clarify what it expects of its "affiliates."

Amazon's affiliates program allows allows individuals and businesses to make money in exchange for promoting Amazon products. It's unknown how many Amazon affiliates there are, but estimates have pinned the number in the hundreds of thousands. Participants in the program receive commission for sales of the items they promote.

An Amazon spokesperson in a statement to The Hill said the company requires its associates to disclose their relationship with Amazon.

“All associates must follow our Associates guidelines, which include obligations to identify as an associate and provide all legally required disclosures," the spokesperson said. "Those who don’t are subject to action including potential closure of their account.” 

Public Citizen said Amazon and its endorsers should better inform consumers of their relationship. The tech giant currently requires its affiliates to tell customers that they make money from recommending certain items, but the group argues the disclosures are often not obvious enough, or do not happen at all.

The complaint includes 19 articles by Amazon affiliates that either did not disclose a business relationship or contained a "non-prominent disclosure." The group also identified 75 Instagram posts that were not adequately flagged as paid endorsements.

Weissman told The Hill that the group isn't sure all of the posts it has flagged are from Amazon affiliates, but it suspects they could be because the articles and posts link to specific products.

The posts in the complaint included an article from NBC's "Today Show," which offered a list of Prime Day products with a hidden disclosure that reads, "TODAY is not being paid to highlight these sales and deals but just so you know, TODAY does have affiliate relationships. So, while every sale and deal product is independently selected, if you buy something through our links, we may get a small share of the revenue."

And another similar post from GameSpot at the end read, "Some links to supporting retailers are automatically made into affiliate links, and GameSpot may receive a small share of those sale."

Weissman said under existing law, the endorser and the business paying for the endorsement are both required to tell consumers about the business relationship.

"There’s a duty on the puppet master to make sure the law is being followed," he said, referring to Amazon.

Consumer groups have been working for years to address the shady advertising practices enabled by internet platforms, but Amazon's affiliates program has not yet undergone significant scrutiny.