A labor coalition wants the FTC to take action against Amazon's 'deceptive' search ads

The Strategic Organizing Center claims the company's ads don't comply with federal guidelines.

Gonzalo Fuentes / reuters

You won’t find a clear distinction between organic search results and paid ads on Amazon, according to a complaint the Strategic Organizing Center filed on Wednesday with the Federal Trade Commission. The organization, which is a coalition of labor unions, analyzed more than 130,000 search results and found that about 28 percent of the results you see on Amazon represent ads. What’s more, SOC says those ads don’t comply with FTC guidelines designed to make it possible for consumers to distinguish between sponsored content and organic search results.

In 2013, the agency said companies should feature prominent shading or borders, in addition to clear text that is properly situated and sized to avoid confusion. SOC found that zero percent of Amazon’s advertisements featured prominent shading and only about 1.1 percent had an easily distinguished border. When it came to the company’s use of “sponsored” labels, SOC found that in about 22 percent of ads the disclosure was buried under more prominent labels, such as ones that said “Highly rated” and “Today’s deals.” Additionally, those disclosures used a font that was smaller and lighter than the ones the company employed to advertise if a product was liked by other customers or part of a deal.

Elsewhere, SOC claims Amazon employs a technique called “lazy loading” where sponsored labels take longer to appear, particularly on slower internet connections. Using a 12 to 25Mbps connection, the organization found those labels could take up to three seconds longer to load than the top banner ad. We’ll note here we had difficulty verifying that claim at Engadget.

SOC has asked the FTC to take “aggressive and swift action” against the company. "Amazon’s violations are so omnipresent that Amazon’s representation that its platform presents ‘search results’ to consumers is itself deceptive," it said.

Amazon disputes SOC's findings. “This report is incorrect and misunderstands FTC guidance – ads in Amazon’s store always include a clear and prominent ‘sponsored’ label, implemented in accordance with FTC guidelines,” an Amazon spokesperson told Engadget. “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.”

It’s hard to say if the FTC will take up SOC’s complaint against Amazon. And, even if it does, what kind of action it could take against the company. Part of the problem here is that the agency’s own guidelines leave some room open for interpretation.

“We understand that there is not any one specific method for clearly and prominently distinguishing advertising from natural search results, and that search engines may develop new methods for distinguishing advertising results,” the FTC said in 2013. “Any method may be used, so long as it is noticeable and understandable to consumers.”

At the same time, this is exactly the kind of issue the agency is likely willing to take up under recently appointed chair Lina Khan. In 2017, Khan, then a student at Yale Law School, published an article titled “Amazon's Antitrust Paradox” in which she argued current US policies and laws weren’t enough to keep companies like Amazon accountable.