Jeff Bezos urged Amazon to flood search results with junk ads, FTC alleges

Amazon flooded its search results with irrelevant “defect” ads at the direction of Founder Jeff Bezos, pumping Amazon profits while steering shoppers to higher-priced goods, the Federal Trade Commission alleged in a newly unredacted portion of its antitrust lawsuit against the company.

“At a key meeting, Mr. Bezos directed his executives to ‘[a]ccept more defects’ as a way to increase the total number of advertisements shown and drive up Amazon’s advertising profits,” the FTC wrote in a now-public part of the complaint. The agency said that defect ads referred to those that that are irrelevant or only somewhat relevant to what a user is searching for.

The agency and 17 states sued the company in late September for allegedly using its monopoly power to increase prices across the web while degrading the shopping experience and excluding rivals. The FTC filed a less-redacted version of the complaint on Thursday, which reveals new details about the effect its growing advertising business has had on shoppers and sellers that use its site.

Amazon began running ads on its site over a decade ago, allowing brands and sellers to bid for higher placement in search results to have their product stand out from competitors. The unit has turned into a juggernaut, and one of Amazon’s higher-margin businesses. 

In 2018, Amazon leapfrogged Microsoft to become the third-largest ad platform in the U.S., trailing only Google and Facebook.

Amazon in 2022 began breaking out advertising revenue in its quarterly earnings reports, revealing just how big the business has become. Last month, Amazon said its ad business brought in more than $12 billion in revenue in the third quarter.

Amazon General Counsel David Zapolsky called the initial complaint “wrong on the facts and the law,” and said its actions challenged by the FTC “have…