Amazon's ads strategy helped pump its profits while steering shoppers to higher-priced goods, the agency alleges.
Amazon flooded its results pages with irrelevant "defect" ads at the direction of Founder Jeff Bezos, the Federal Trade Commission alleged in a newly unredacted portion of its antitrust lawsuit against the company.
"At a key meeting, Mr. Bezos directed his executives to 'ccept more defects' as a way to increase the total number of advertisements shown and drive up Amazon's advertising profits," the FTC wrote in a now-public part of the complaint. The agency said that defect ads referred to those that that are irrelevant or only somewhat relevant to what a user is searching for.
Amazon did not immediately provide a statement on the claims against its advertising business, but Amazon spokesperson Tim Doyle disputed other aspects of the complaint made public Thursday.According to the new version of the complaint, Amazon's ads strategy worsened the shopping experience for users.
Amazon weighed placing guardrails on ads in search results, but senior executives at the company ultimately determined they shouldn't be "constrained" by limitations such as how relevant the products were to what shoppers search for. The increase in ads was not just annoying, according to the FTC. It also helped push shoppers toward higher-priced items.
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