“Amazon has increased not only the number of advertisements it shows, but also the number of irrelevant junk ads, internally called ‘defects,’” newly public portions of the lawsuit say. “Mr. Bezos instructed his executives to ‘[a]ccept more defects’ because Amazon can extract billions of dollars through increased advertising despite worsening its services for customers.”
The suit also alleges that “Amazon executives internally acknowledge this creates ‘harm to consumers’ by making it ‘almost impossible for high quality, helpful organic content to win over barely relevant sponsored content.’”
A spokesperson for Amazon did not immediately respond to a request for comment. Bezos owns The Washington Post, and its interim CEO, Patty Stonesifer, sits on Amazon’s board.
The FTC filed its long-awaited suit against Amazon in September, surprising the industry by arguing that Amazon effectively raises prices for consumers by charging merchants fees to advertise in its digital marketplace. FTC Chair Lina Khan made a splash in antitrust with her 2017 paper “Amazon’s Antitrust Paradox,” published when she was a law student at Yale. But the case she’s making against Amazon today is notably different from the argument she made six years ago.
The allegations that Bezos would knowingly degrade the Amazon search experience for customers are surprising given the billionaire’s much-touted obsession with delighting customers. At Amazon, all employees must practice “customer obsession,” which, according to corporate leadership principles, means they must “start with the customer and work backwards.”
But, in its complaint, the FTC says Amazon executives saw they could make more money by increasing the number of ads, even if those ads worsened the quality of search results and harmed the customer experience.
This story is breaking and will be updated.
