Public Citizen Calls on the FTC to Investigate Amazon’s Marketing Practices
WASHINGTON, D.C. – The Federal Trade Commission (FTC) should investigate Amazon’s apparent failure to ensure that paid Prime Day endorsers disclosed that they receive commissions on sales they generate, Public Citizen said today in a complaint to the agency.
Leading up to and through Amazon Prime Day on July 15-16, Americans’ social media were stuffed with Prime Day recommendations, a substantial portion of which were paid endorsements, Public Citizen alleged in its complaint. In many cases, the endorsement relationship appears not to have been disclosed to consumers or was communicated with inadequate disclosures, violating FTC policies and principles stating that people have a right to know when they are being advertised to.
Amazon operates an extensive “associates” or “affiliates” program, by which reviewers refer their audience to products on Amazon in exchange for a commission on sales generated from the reviewers’ websites. Estimates of the number of associates range from 100,000 to 1 million worldwide.
When Amazon associates post reviews or other information about products available on Amazon, they are functioning as endorsers who are paid for the endorsement through sales commissions rather than a flat fee. Although Amazon instructs associates to disclose online their relationship to Amazon, this instruction is often not prominent on the associates’ website, and it appears to be frequently and routinely flouted.
“Amazon has colonized huge swaths of the internet and people’s social media feeds, turning them into platforms for Amazon’s disguised advertising, in violation of a core principle of fair advertising law,” said Public Citizen President Robert Weissman. “When people see a recommendation for an Amazon Prime Day ‘best buy,’ they have a right to know if the person or company making that recommendation is getting a cut on the sales it is generating – but all too often that information is not disclosed.”
Read the complaint here.