Amazon could face legal action from the US Federal Trade Commission (FTC) in a case that may expose the company to civil penalties worth billions of dollars, Bloomberg reported, citing unnamed sources.
The regulator has prepared a possible complaint against the company as part of an ongoing investigation, people familiar with the matter told the publication.
The report added that several state attorneys general are also involved.
According to those sources, the FTC could conclude the matter as early as this summer, either by filing a lawsuit or reaching a settlement.
Any final decision on a settlement or legal action would require a vote from the FTC’s two Republican commissioners, Andrew Ferguson and Mark Meador.
Bloomberg reported that although the FTC faces limits on its ability to secure financial penalties, the participation of state authorities could sidestep some of those constraints.
State consumer protection and unfair competition laws can permit daily fines running into tens of thousands of dollars.
Spokespeople for both Amazon and the FTC declined to comment, the report said.
The investigation, which intensified last year and is being handled by the FTC’s consumer protection division, is examining whether Amazon adequately explained the terms and pricing of advertising placements shown as top products in searches on its marketplace, Bloomberg previously reported.
The inquiry centres on a significant and expanding part of Amazon’s business.
In a company filing, Amazon said its advertising operations generated $68.6bn in revenue last year.
That figure covers search advertising, including sponsored listings on the marketplace, alongside video advertising and online display adverts shown elsewhere on the internet.
Bloomberg had also reported that, during the investigation last year, the FTC requested information on Amazon’s advertising auctions and whether the company disclosed “reserve pricing” for some search adverts — minimum price thresholds advertisers must meet before they are able to purchase an ad.
