Amazon Faces Potential FTC Lawsuit Over Ad Practices

Amazon.com (NASDAQ: AMZN) may face a U.S. Federal Trade Commission (FTC) lawsuit that could result in civil penalties, following allegations that the e-commerce giant misled advertisers, Bloomberg News reported on Tuesday.

Details of the Action

According to people familiar with the matter, the FTC has a possible complaint against Amazon as part of an ongoing probe. The investigation, first reported by Reuters last year, is examining whether Amazon and Alphabet's Google (GOOGL) misled advertisers placing ads on their websites.

Company's Position

Neither Amazon nor Google has officially commented on the report. Both companies are expected to defend their advertising practices if a lawsuit is filed.

Precedents and Context

The development comes amid heightened regulatory scrutiny of big tech companies in the U.S. The FTC has previously imposed fines on companies for similar misleading advertising practices.

Potential Financial Impact

The reports did not specify the potential size of penalties, but they could be substantial given the scale of Amazon's advertising operations. Amazon's advertising revenue exceeded $31 billion in 2021.