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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. 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. 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. "Kantar, an independent data and insights firm, found Amazon's advertising to be the most useful and relevant to customers around the world."

Persons: Jeff Bezos, Bezos, David Zapolsky, Tim Doyle Organizations: Federal Trade Commission, FTC, Amazon, Microsoft, Facebook Locations: U.S

FTC Chairwoman Lina Khan testifies during a budget hearing of the House Energy and Commerce Subcommittee on Innovation, Data, and Commerce, April 18, 2023. Khan pointed to scale on Wednesday as a way Amazon leverages its power to dampen competition. Khan also explained the FTC's decision to define the market Amazon has monopolized as the online superstore. "We've had a whole set of antitrust cases that have succeeded when defining a market as the superstore market." This complaint applies that idea to the online world, Khan said, adding that there are functions that only an online superstore can serve through the "depth and breadth" of offerings.

Persons: Lina Khan, Khan, CNBC's Andrew Ross Sorkin, it's, We've Organizations: House Energy, Commerce, Amazon, Federal Trade, FTC, Yale, Intelligence Locations: U.S

The Federal Trade Commission has filed its long-anticipated antitrust lawsuit against Amazon . In a sweeping complaint unveiled Tuesday, the FTC and attorneys general from 17 states accused Amazon of wielding its "monopoly power" to inflate prices, degrade quality for shoppers and unlawfully exclude rivals, thereby undermining competition. David Zapolsky, Amazon's general counsel and senior vice president of global public policy, said in a statement that the FTC's complaint is "wrong on the facts and the law." The lawsuit is a major milestone for FTC Chair Lina Khan, who rose to prominence for her 2017 Yale Law Journal note, "Amazon's Antitrust Paradox." Through her work at the FTC, Khan has sought to reset that framework and push the boundaries of antitrust law through risky legal battles.

Persons: Andy Jassy, David Zapolsky, Amazon's, Zapolsky, Lina Khan, Khan Organizations: New York Times DealBook, Jazz At Lincoln Center, Federal Trade Commission, Amazon, FTC, Yale Locations: New York City

Amazon will pay the Federal Trade Commission more than $30 million to settle allegations of privacy lapses in its Alexa and Ring divisions, according to filings on Wednesday. A separate suit alleges Amazon violated the FTC Act and Children's Online Privacy Protection Act by illegally retaining thousands of children's information through their profiles with the Alexa voice assistant. Under the proposed settlement, Amazon will have to delete inactive child accounts as well as some voice recordings and geolocation information. Amazon has faced scrutiny over the data that's collected by its kids-oriented Echo smart speakers, which use Alexa to respond to commands. Amazon will also have to implement a privacy program to govern its use of geolocation information.

Organizations: Amazon, Federal Trade Commission, FTC, Justice, COPPA

The Federal Trade Commission late Wednesday rejected Amazon's bid to exclude CEO Andy Jassy and founder Jeff Bezos from testifying in a probe into the retail giant's Prime program. Amazon even accused FTC staff of harassing Bezos and Jassy for their participation. Amazon said last month it has been complying with the FTC's requests so far, producing some 37,000 pages of documents. "Amazon has cooperated with the FTC throughout the investigation and already produced tens of thousands of pages of documents. WATCH: How Amazon Prime turned Amazon into a $1.6 trillion empire

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