Union alleges Amazon ads are 'unlawfully deceiving' consumers

A union coalition alleges Amazon is deceiving consumers by flouting Federal Trade Commission (FTC) advertising guidelines and is calling for the regulatory agency to probe the e-commerce giant’s practices. 

The Strategic Organizing Center, a coalition of labor unions, filed a complaint with the FTC Wednesday alleging Amazon doesn't distinguish clearly enough paid ads from organic search results.

Strategic Organizing Center researchers conducted an analysis of more than 130,000 Amazon product search results on both desktop and mobile devices between Aug. 30 and Nov. 11. The analysis found that 28 percent of all search results examined were actually third-party advertisements, according to the complaint. 

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The complaint alleges the ads “massively and categorically” violated the FTC’s digital ads guidelines, and argues that none of the results comply with all of the FTC’s requirements.

In 2002 the FTC published a letter advising search engines about distinguishing advertising from natural search results. The agency issued an updated letter in 2013 with guidelines calling for companies to use visual causes, such as background shading, or text labels, to distinguish between sponsored content. 

“Any method may be used, so long as it is noticeable and understandable to consumers,” the agency said at the time. 

But the complaint, which was first reported by The Washington Post, alleges no Amazon ads were distinguished from organic search results by prominent shading and only 1 percent of ads were distinguished by a prominent border, according to the union coalition.

An Amazon spokesperson pushed back on the allegations.

“We design our store to help customers discover products we think may best meet their needs – sponsored ads is one of the ways to help them find products they may be interested in. This report is incorrect and misstates FTC guidance – ads in Amazon’s store always include a clear and prominent ‘sponsored’ label, implemented in accordance with FTC guidelines,” the spokesperson said in a statement.  

The Strategic Organizing Center is calling for the FTC to investigate Amazon’s “deceptive advertising practices” and take “ swift and forceful action to halt these consumer abuses.” 

A spokesperson for the FTC declined to comment on the complaint.