The Federal Trade Commission and 22 states filed a lawsuit against Amazon alleging the company overcharged over one million advertising customers.
The Federal Trade Commission and 22 states filed a lawsuit on Monday against Amazon, alleging the company manipulated online auction results to overcharge more than one million advertising customers. The lawsuit claims that since 2019, Amazon has likely extracted over $20 billion from advertisers by secretly raising minimum prices without their knowledge. In a2nd price auctions, winning advertisers are typically expected to pay one cent more than the second-highest bidder. However, the complaint alleges that Amazon charged winning bidders their own winning bid close to 80% of the time. The FTC and the states argue that these extra costs were eventually passed down to shoppers. Amazon strongly disagrees with the lawsuit, calling it misguided. The company stated that advertisers adjust bids based on real-world performance rather than auction mechanics. Amazon also noted that average winning bids fell 50% from 2019 to 2025 on Sponsored Products search ads. Following the announcement of the lawsuit, Amazon shares fell 2.5% on Monday.
Sources
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Amazon rigged billions in ad pricing, lawsuit from states and US watchdog alleges
BBC
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FTC sues Amazon, alleging it overcharged advertisers
CNN
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Amazon’s stock slips as the FTC alleges billions of dollars in hidden ad fees
MarketWatch