Amazon shares slipped more than 1% on Wednesday after a report said the U.S. Federal Trade Commission is considering legal action against the e-commerce company over its advertising practices. The FTC has prepared a potential complaint as part of an ongoing investigation into whether Amazon provided advertisers with sufficient disclosure regarding pricing and other terms, and is reportedly seeking civil penalties that could amount to billions of dollars. Regulators are evaluating Amazon's advertising auction system, including whether reserve pricing requirements for certain search advertisements were fully disclosed. Multiple state attorneys general are participating in the investigation, and the matter could be resolved through either a settlement or a lawsuit, with a decision potentially coming as soon as this summer.
Amazon.com IncFTC considering lawsuit over ad practices, seeking billions in civil penalties