“Amazon increased not only the number of ads it served, but also the number of inappropriate spam ads it served internally, known as ‘defects,'” the new public portions of the lawsuit state. “Mr. Bezos instructed his executives to do so.[a]’Accept more flaws’ because Amazon can make billions of dollars through increased advertising even as it worsens its customer service.
“Amazon executives admit internally that this is ‘to the detriment of consumers,’ making it ‘almost impossible for high-quality, effective organic content to beat out more 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 Stonecipher sits on Amazon’s board.
The FTC filed its long-awaited lawsuit against Amazon in September, surprising the industry by arguing that Amazon effectively raises prices for consumers by charging merchants fees to advertise on its digital marketplace. FTC chair Lina Khan caused antitrust with her 2017 paper “Amazon’s Antitrust Paradox,” published while she was a law student at Yale. But the case he makes against Amazon today is markedly different from the one he made six years ago.
Allegations that Bezos will knowingly degrade the Amazon search experience for customers are surprising given the billionaire’s reputation for delighting customers. At Amazon, all employees must be “customer-obsessed,” which means they “start with the customer and work backwards,” according to corporate leadership principles.
But the FTC said in its complaint that Amazon executives can make more money by increasing the number of ads, even if those ads degrade the quality of search results and harm the customer experience.
This story is breaking and will be updated.
