Amazon dupes consumers by failing to clearly
differentiate paid ads from organic listings in its search results, a coalition of labor unions alleges in a complaint filed Wednesday with the Federal Trade Commission.
“Amazon’s
advertising practices fail to comply with the FTC’s own guidelines for digital ads, and its search pages convey the overall net impression that they are organic results rather than dominated by
advertisements,” the Strategic Organizing Center -- which includes the Service Employees International Union, the International Brotherhood of Teamsters, the Communications Workers of America
and the United Farmworkers of America -- alleges in its complaint.
The Strategic Organizing Center says its researchers recently examined more than 130,000 Amazon product search results, and
concluded that the company “was substantially or entirely out of compliance with all the FTC’s specific guidelines” regarding ads on search engines.
An Amazon spokesperson
calls the report “incorrect,” adding that it misunderstands the FTC's guidance.
“Ads in Amazon’s store always include a clear and prominent “sponsored”
label, implemented in accordance with FTC guidelines,” the spokesperson says.
The unions' complaint references guidance issued by the FTC in 2013, when the agency criticized search engines for blurring the differences between paid ads and organic
listings.
At the time, the FTC said in letters to Google, Bing and other search engine operators that consumers “should be able to easily distinguish a
natural search result from advertising.”
The FTC suggested that search engines could cut down on confusion by placing ads in box with “prominent shading that has a clear
outline,” or using a “prominent border” between ads and natural search results.
The agency also recommended that search engines place “ad” labels on the
upper-left hand corners of ad blocks.
While the FTC made specific formatting recommendations, the agency also said it wasn't requiring companies to use any particular techniques to distinguish
ads from organic results.
“Any method may be used, so long as it is noticeable and understandable to consumers,” the FTC said in its letters to search engines.
The
Strategic Organization Center alleges that its investigation of Amazon's search results found that the company's ads don't follow the labelling formats recommended by the FTC.
“No Amazon
ads were distinguished from organic search results by prominent shading, and only 1% were distinguished by a prominent border. More than 6 in 10 (61%) lacked a large and visible label,” the
group alleges.
The unions added that the “sponsored” labels that appear in some banner ads don't appear until after the rest of the page had loaded.
“Amazon engaged
in deception unanticipated by FTC guidelines by delaying even loading ad labels through 'lazy loading' for an entire category of advertisements,” the unions write.
Amazon says any delays
in the rendering of “sponsored” labels are glitches, and will be addressed.
The Strategic Organizing Center also says that 8% of the search results examined were actually
third-party ads.
“The near-categorical noncompliance of Amazon’s advertisements with the FTC’s guidelines is egregious, but the pervasiveness of advertisements in
Amazon’s search results, with the highest portion in the main body of those search results, adds significantly to the level of consumer harm likely caused by these violations,” the
coalition writes.