Federal Trade Commission, 22 states accuse Amazon of $20B scheme

Filed in the U.S. District Court for the Western District of Washington, the case is known as Federal Trade Commission v. Amazon. Relief is sought in the form of a permanent injunction, monetary relief, additional relief as the court deems “just and proper,” and awarding of states civil penalties, restitution, disgorgement and or forfeitures for each violation of respective state laws.

Specific monetary relief for North Carolina is not within the filing. There is a request of up to $5,000 for each knowing violation, and a request for additional unquantified relief.

Documents from Amazon, the plaintiffs say, prove the Big Five tech company knew “advertisers were bidding based on the belief that they were participating in a true second-price auction. But internally, Amazon employees discussed increasing prices while “hoping that advertisers don’t notice and decrease bids or ad spend,” Jackson’s office said in a release.

The litigation says Amazon knew the ceiling for detection. Jackson said businesses can pass higher advertising expenses to consumers through high prices for groceries, pharmacy products, clothing, school supplies and other high volume buys through Amazon.

“Amazon secretly rigged its bidding system to charge businesses more, and customers paid the price,” Jackson said. “We believe Amazon manipulated its ad auctions to inflate what sellers had to pay, adding billions of dollars in costs that ultimately get passed on to customers with higher prices. We’re taking Amazon to court to stop it.”

The litigation is not tied to the Amazon plan for a data center in North Carolina near the South Carolina border in Richmond County. There, in the community of Hamlet, is a plan for a $10 billion investment in the Amazon Web Services data center supply chain.

The global technology company, replete with e-commerce, digital streaming and online advertising, said a minimum of 500 jobs in high-tech cloud computing and artificial intelligence would be in an innovation campus. Such jobs will be data center engineers, network specialists, engineering operations managers, security specialists, and other technical roles, Amazon said.

The Big Five tech companies, as they are colloquially known, are Amazon, Apple, Meta, Microsoft and Alphabet. Former names were Facebook rather than Meta, and Google rather than Alphabet.

Amazon’s 2024 financial report credited 11% growth year over year, up to $638 billion. It said Amazon Web Services revenue is $108 billion. Ten years earlier, the company revenue was $89 billion and web services $4.6 billion.