Amazon Misleading Consumers About Sponsored Products, Labor Group Says

Group tells FTC Amazon is abusing consumer trust.

“Amazon doesn’t distinguish well enough between paid ads and organic search results, something that could trick consumers” into unwittingly clicking on sponsored products, according to a complaint filed with the Federal Trade Commission by the Strategic Organizing Center, a coalition of labor unions. More than 25% of search results on Amazon are paid ads, the group says. But because the platform doesn’t clearly label items as sponsored, Amazon could be “unlawfully deceiving” customers.

FTC’s digital ad guidelines require clear and conspicuous labeling of advertisements. The government has advised digital search providers that it is deceptive to fail to “clearly and prominently” distinguish advertisements from organic search results. The union group conducted its own analysis of 130,000 Amazon search result pages. It determined that deception on Amazon’s online search pages was “massive because Amazon’s advertisements both categorically violated the FTC’s guidelines and constituted an overwhelming portion of Amazon’s search pages.” Among other things, the group says Amazon’s ad labels take time to load and, as a result, are not immediately displayed to shoppers.

The Strategic Organizing Center notes that Amazon is rapidly growing into a dominant online advertiser and is already the largest online shopping platform in the world. Amazon accounts for 41.4% of the annual U.S. retail e-commerce sales in 2021, and its growth has been explosive during the pandemic, the group says. It asks the FTC to act quickly to put an end to what the Center says are “misleading abuses of consumer trust.” 

Edited by Tom Hagy for MoginRubin LLP.

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