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Public Citizen calls for FTC to probe Amazon over paid reviews

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  • As many as 1 million people worldwide review Amazon products for pay based on the sales their writing generates, but consumer advocates say the retailer's customers may not be fully informed about the relationship.
  • Public Citizen wants the FTC to investigate whether the e-commerce company misled subscribers with undisclosed paid endorsements related to its recent Prime Day sales event.
  • The watchdog group said it found numerous examples on social media that suggest that FTC rules are regularly ignored by the Amazon associates who write the product reviews.

An estimated 100,000 -- and as many as a million -- people around the globe review Amazon products for pay that's based on the sales their writing generates. But consumer advocates allege that commission-based system isn't readily apparent to Amazon Prime subscribers, whose social-media feeds and email boxes were recently inundated with what amounts to undisclosed paid endorsements ahead of the retailer's Prime Day promotion last week. 

That's the contention of Public Citizen, which on Tuesday called on the Federal Trade Commission to investigate whether the online retailer misled consumers in violation of the agency's rules.

"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," Public Citizen President Robert Weissman said in a statement. "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."

A substantial portion of Prime Day recommendations directed at consumers in the days before and during the two-day sales event last week were paid endorsements, yet in many cases that relationship was inadequately or not disclosed, according to Public Citizen. While Amazon instructs its reviewers to disclose that they are paid for the reviews through sales commissions and not a flat fee, the direction appears to be frequently and routinely ignored, Public Citizen said.

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"All associates must follow our associates guidelines, which include obligations to identify as an associate and provide all legally required disclosures," an Amazon spokesperson emailed. "Those who don't are subject to action including potential closure of their account."

An FTC spokesperson confirmed the agency had received the consumer group's complaint, but declined further comment.  

In a letter to the FTC urging the agency to probe the matter, Public Citizen also took issue with Amazon's suggested disclosure phrase -- "As an Amazon Associate I earn from qualifying purchases" -- calling it less than clear. Weissman wrote in a July 23 letter to the FTC that group favors a more explicit disclosure that would state: "This is a paid endorsement. I receive commissions on sales if you click on links in this story or use the code included in the review."

In reviewing Amazon Prime Day promotions, Public Citizen found 15 web-published articles that it said had no disclosure and eight that contained non-prominent disclosures. It also found 53 Instagram postings without any disclosure and 22 the group said were inadequate. The organization said it's possible that some of the reviews were independent and that no disclosure was required.

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