Federal regulators and 22 states sue Amazon for allegedly overcharging advertisers through a secret auction system.
The Federal Trade Commission and a bipartisan group of 22 state attorneys general filed a lawsuit against Amazon in the U.S. District Court in Washington. The complaint alleges that the company secretly and systematically overcharged approximately 1.2 million brands and sellers by manipulating its online advertising auctions.
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Regulators claim that for over seven years, Amazon misrepresented its auction process. While the company told advertisers it used a "second price" auction, it allegedly added an undisclosed "soft reserve price" starting in 2019. This shift effectively turned the auction into a first-price sale, allegedly extracting more than $20 billion from advertisers who lacked the ability to audit the charges. Jennifer Davenport, the New Jersey Attorney General, joined the suit, noting that the secret upcharges affected advertisements for essentials like food and pharmacy products. Amazon responded by stating the lawsuit is misguided and that the Federal Trade Commission misrepresented the reality of its ad auctions. The company argued that its auction system saved advertisers more than $8 billion between 2021 and 2025.
Sources
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The U.S. sues Amazon again
NPR
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N.J. is going after Amazon over a secret scheme that jacked up prices for years
NJ.com