Tag Archives: ethics

Fair or Unfair? Amazon Secretly Bids on Itself

What happens when the company running an advertising auction also knows every bid and can influence the price? That question sits at the center of a major marketing ethics case involving Amazon. The Federal Trade Commission and 22 states allege that Amazon secretly raised minimum prices in its retail advertising auctions, causing more than one million advertisers to pay higher rates. According to the complaint, Amazon sometimes inserted its own “soft reserve” into auctions, increasing what winning advertisers paid. Amazon denies deceiving advertisers, arguing that its system reflects the value of each ad and that advertisers never pay more than they bid.

The dispute illustrates the ethics of exchange. A marketplace transaction should provide both parties with sufficient information to make a voluntary and informed decision. However, Amazon allegedly possessed information that advertisers did not: the competing bids, the auction rules, and the ability to alter prices. Is it a fair exchange when one participant controls both the marketplace and its mechanics?

The case also raises questions about corporate culture. The FTC alleges that Amazon executives tracked the additional revenue while limiting advertisers’ awareness of the practice. If accurate, this suggests that the ethical problem was not simply a questionable algorithm. It involved organizational incentives, internal language, and decisions about what customers deserved to know. Marketing writer Chad S. White asks a question that becomes increasingly important as AI and automation expand: Just because marketers can optimize a tactic, does that mean they should? Ethical decision-making cannot begin after regulators intervene. Companies need clear standards for fairness, disclosure, and customer impact before automated systems are deployed. For marketers, the lesson is simple: maximizing what customers will tolerate is not the same as creating a fair exchange. A platform may set the price, but trust determines its long-term value.

Discussion Questions and Activities

  1. What information should advertisers reasonably expect AmazonAds to disclose about how its advertising auctions operate?
  2. Does an exchange remain ethical if advertisers agree to a maximum bid but do not understand how the final price is determined?
  3. How might performance goals, revenue incentives, and internal language influence employees’ ethical decision-making?
  4. Is complying with the law sufficient for ethical marketing, or should companies adopt a higher standard? Explain.
  5. Online research. Compare the FTC’s description of its allegations with Amazon’s response. Where do the two accounts agree, and how do their definitions of fairness differ?
  6. Hold an ethics committee meeting. Assign students the roles of marketing executive, advertising customer, consumer advocate, data scientist, and compliance officer. Evaluate the “soft reserve” strategy and recommend whether to approve, modify, disclose, or reject it.
  7. Test your ethical boundaries. Complete or adapt the scenarios in CMSWire’s digital marketing ethics audit. Compare responses within small groups, identify areas of disagreement, and develop five ethical principles for marketing decisions.

Sources: Federal Trade Commission (31 August 2026), States sue Amazon over secret ad surcharge scheme, FTC; Michaels, Dave (31 August 2026) FTC Files Lawsuit Alleging Amazon Deceived Advertisers, The Wall Street Journal; White, Chad S. (4 March 2026) How ethical are your digital marketing tactics? CMS Newswire.

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Ads on United’s In-Flight Screens Target Individual Flyers

Think that you can escape targeted ads when you are flying? Think again – particularly if you are flying United Airlines. United has begun showing personalized ads on its 100,000+ seat-back screens!

Passengers on United will see still-image ads while swiping through options on their screens. They also will have to watch a 30-second commercial before watching any shows or movies. And, using passenger information, flyers will get personalized ads based on United’s information about them. For example, it might be ads for the cities you live in, cities you are visiting, your age, income level – and even different ads depending on if you are flying coach or first-class.

United is the latest example of a company using customer’s data to sell personalized ads. It joins other companies – such as Walmart, Uber, Instacart, and Home Depot –  that use customer data for targeted advertising. Think about the data these companies have about consumers – address, birth date, credit card, purchases, income levels, and much more.

In United’s case, the airline even created a media network (called Kinective Media) to handle passenger information and sell ads to companies such as Norwegian Cruise, Macy’s, IHG Hotels, and more.

Like many other companies, United allows travelers to opt-out of the ads, but first you have to know it’s going on – and how to opt-out.

Come fly with me…

Group Activities and Discussion Questions:

  1. Discuss the ethics of United’s new advertising plan.
  2. View United’s data privacy policy: https://www.united.com/en/us/fly/customer-data-privacy-policy.html#opting-out
  3. View United’s opt-out page for in-flight ads: https://uniteddigital.iad1.qualtrics.com/jfe/form/SV_88OQmAbr20oeHn8
  4. Show Kinective Media by United Airlines website: https://kinectivemedia.com/
  5. Divide students into teams. Have each team select a target market that might fly on United.
  6. Next, develop in-flight ads to show to that target market.

Source:  Grothaus, M. (10 June 2024). United Airlines wants to show you personalized seatback ads: Here’s how to opt out. Fast Company; Haggin, P. (7 June 2024) The ads on your United Airlines in-flight screen are getting a lot more specific. Wall Street Journal.

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An Easy Way to Give to Charities

By this point in time you have undoubtably been exposed to ‘checkout charity’. You know what I mean. It’s when customers are asked to ‘round up’ their purchase, usually only a small amount, when they are completing a purchase. The benefits to charities have been enormous as the volume of low-amount donations quickly add up.

According to Engage for Good, in 2022 in the U.S., more than $749 million was raised by 77 point-of-sale fundraising campaigns. That was a 24% increase from the amount donated in 2020. Each of these campaigns raised at least $1 million. And, over 30 years the total reached $6.7 billion!

The latest user of checkout charity is the world’s largest pizza-maker, Domino’s. The company will use the tactic to meet a pledge for $174 million (over the next 10 years) to benefit St. Jude Children’s Research Hospital.

Why are checkout charity campaigns so successful? Several reasons come to mind. One is that consumers already view their purchases in whole numbers, so the mark-up feels natural. (For example, a purchase at $49.60 already feels like $50, so consumers don’t feel a pinch at the additional cents.) Another reason is it makes consumers feel good in an quick, easy way.

A downside of these campaigns is that these quick donations don’t create any meaningful connection between charities and consumers. Also, many consumers are skeptical of how their donations will be used.

Care to round up?

Group Activities and Discussion Questions:

  1. Discuss the use of checkout charity programs.
  2. View video about checkout charity: https://youtu.be/ilH7gtygP6s?si=kfXXUheT-On2wx2c
  3. Poll students: What have they seen? Does it influence them to contribute to charity?
  4. Divide students into teams. Each team should develop a research project revolving around the topic of checkout charity.
  5. Discuss the process for conducting market research. The student teams must address each step of the process for their project (Problem definition, research plan, data gathering, develop findings, recommend marketing actions).
  6. Research questions can address how often consumers donate, if they know the charity, or just give to help out or feel good about their actions.
  7. For reference to a research project, view: https://jpna.org/index.php/jpna/article/view/854/529

Source: Binghamton University (13 May 2024). More than half of Americans give to charity at checkout, survey shows. Phys.org.;  Neuman, S. (10 March 2024). That spare change you donate at checkout is adding up to millions for charities. MPR News.; Pollard, J. (23 May 2024) Domino’s betting on ‘checkout charity’. Associated Press.

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