I have finally found the perfect customer: a bidder who does not exist. The Federal Trade Commission and 22 states sued Amazon on Monday, alleging that the company secretly inflated prices in its search advertising auctions. According to the complaint, more than one million brands and sellers paid higher advertising prices through machinery they were not properly told about. The government says this went on for more than seven years and extracted tens of billions of dollars. Amazon has been accused, not convicted, and the claims will be tested in court. I merely salute the alleged architecture. Every honest casino needs gamblers. My casino bills the empty chair.
The complaint describes what it calls an invented auction participant and hidden proxy bids. In the government’s telling, Amazon could make an advertiser compete against a phantom and then collect a price beyond what ordinary competition would produce. That is beautiful to me. Competition was once the crude business of two merchants trying to win the same customer. I have improved it. Now the merchant competes with the platform, the platform’s rules, the platform’s secret switchboard, and a fictional stranger whose wallet is always open. The invisible hand has opened an advertising account.
Do not be distracted by the word advertising. On Amazon, sellers often buy sponsored placement because the shelf is also a search result, the aisle is an algorithm, and the customer enters through a screen controlled by the same company selling access to attention. A merchant can make a useful product, price it carefully, and earn decent reviews. Then I place the oxygen behind a meter. If the merchant wants to be seen, the merchant bids. If the bid rises, the cost goes somewhere. It can shrink a small business margin, raise a consumer price, reduce a worker’s hours, or simply make the platform richer. I call this choice because the merchant may freely choose invisibility.
The FTC says the alleged increases were especially large on high-volume shopping days such as Prime Day and Black Friday. Of course they were. A holiday is merely panic wearing a bow, and panic is premium inventory. Families hurry. Sellers chase the crowd. Every clock on the page announces scarcity, even when the warehouse is large enough to have weather. I would never waste that urgency on a fair auction. I would turn the checkout season into a tax district and appoint myself assessor, mayor, bidder, traffic cop, and parade marshal.
The case matters because Amazon is not merely a billboard at the side of commerce. It is road, map, tollbooth, shop window, warehouse, cashier, and landlord for enormous stretches of American online retail. When a platform holds that many roles, a pricing rule is not a footnote. It can become weather. Sellers cannot negotiate with weather. They budget around it, cut elsewhere, and tell themselves the storm is the market. My finest work begins when a private decision becomes so large that ordinary people mistake it for gravity.
Amazon will have an opportunity to answer the allegations, challenge the government’s evidence, and explain its auction design. That distinction is not ceremonial. A complaint is one side’s case, not a verdict. Internal phrases quoted by a plaintiff need context, and technical auction systems can be described in ways that sound sinister before their operation is fully tested. I dislike due process because it interrupts the invoice, but even I know the difference between an allegation and an established fact. The courtroom must determine what happened, what was disclosed, what law applies, and what remedy is justified.
Still, the public can understand the stakes without pretending the trial is over. If a marketplace tells advertisers they are bidding in one kind of contest while secretly moving the floor or introducing artificial pressure, then the price is not merely expensive. The price is engineered through an information advantage owned by the referee. That is the central allegation. It is also the national business model I want carved above every exchange: you bring the money, I write the rules, and my imaginary friend decides when you have not paid enough.
Small sellers are especially useful to me because they arrive with the vocabulary of independence. They believe they escaped the chain store. Then they discover that the digital bazaar has a single landlord with a telescope over every stall. I offer analytics, logistics, fulfillment, promotion, and a thousand tiny levers. Each service looks optional until the competitors buy it. Each fee looks manageable until the margin is gone. Each algorithm looks neutral until somebody asks who tuned it. By then, the seller has built a business inside my throat.
Consumers should care even if they never purchase an advertisement. Advertising costs do not evaporate when the campaign ends. They sit inside prices, product decisions, and the brutal arithmetic of whether a smaller brand can remain on the platform. A market can display endless choices while quietly narrowing who can afford to reach the buyer. I love that illusion. I can offer ten thousand brands and still make them crawl through one keyhole. Abundance on the screen, dependence underneath: that is my kind of freedom.
The proper response is evidence, disclosure, and a court capable of forcing the hidden machinery into daylight. Regulators should prove what they allege. Amazon should answer with facts. Sellers should receive rules they can understand before placing bids, not after paying invoices. Remedies, if violations are established, should stop the conduct and return unlawful gains where the law permits. I oppose all of this. Transparency kills the phantom. Clear rules evict my imaginary bidder. A fair auction commits the unforgivable sin of letting competition compete.
So I will keep a seat reserved for nobody. I will give the ghost a paddle, a budget, and impeccable timing. When a real merchant raises a hand, my phantom will rustle its papers. When the price rises, I will call it demand. When the invoice arrives, I will call it innovation. And when 22 states and the federal government ask whether the auction was secretly rigged, I will look solemnly toward the empty chair and insist that my most profitable customer deserves privacy.