The complaint was filed with the Federal Trade Commission by the Strategic Organizing Center. 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 are ads. FTC guidelines designed to make it possible for consumers to distinguish between sponsored content and organic search results are not complied with by those ads.
In order to avoid confusion, the agency said companies should feature prominent shading or borders, as well as clear text that is properly situated and sized. Only a small percentage of Amazon's advertisements featured prominent shading and only a small percentage had an easily distinguished border. 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." The disclosures used a smaller and lighter version of the company's advertisement if a product was liked by other customers or part of a deal.
Amazon uses a technique called "lazy loading" where sponsored labels take longer to appear on slower internet connections. The organization found that the labels could take up to three seconds to load, compared to the top banner ad. We had trouble proving that claim at Engadget.
The FTC has been asked to take aggressive and swift action against the company. It said that Amazon's representation that its platform presents "search results" to consumers is deceptive.
Amazon disagrees with the findings. The report is incorrect and misunderstands FTC guidance, which is that ads in Amazon's store always include a clear and prominent sponsored label, according to an Amazon spokesman. One of the ways to help customers find products they may be interested in is through sponsored ads.
It is not certain if the FTC will take up the complaint against Amazon. What kind of action it could take against the company if it does. Some room for interpretation is left by the agency's own guidelines.
There is no one specific method for clearly and prominently distinguishing advertising from natural search results, and search engines may develop new methods for distinguishing advertising results, according to the FTC. Any method can be used if it is noticeable and understandable to consumers.
This is the kind of issue the agency is likely willing to take up under the new chair. In the fall of 2017, Khan 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.
