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The Federal Trade Commission and 22 state attorneys general sued Amazon for allegedly overcharging advertisers through hidden auction surcharges.

The Federal Trade Commission and 22 state attorneys general filed a lawsuit against Amazon, alleging the e-commerce giant secretly and systematically overcharged approximately 1.2 million advertisers by manipulating its ad auction pricing. The complaint states that starting in 2019, Amazon added a hidden markup internally referred to as a "soft reserve price" to its second-price auction system. This strategy allegedly generated more than $20 billion in additional revenue for Amazon over roughly seven years. FTC Chairman Andrew Ferguson stated that millions of advertising customers were misled into paying significantly higher prices, which were largely passed on to American consumers. Amazon responded in a public blog post, calling the lawsuit misguided and asserting there was no harm to consumers. The company argued that its auction systems have saved advertisers $8 billion between 2021 and 2025. The lawsuit centers on Sponsored Products, Sponsored Brands, and Sponsored Display ads. Amazon currently holds the third-largest digital advertising business globally, trailing only Google and Meta. The company is also facing a separate monopoly case regarding its marketplace practices, which is scheduled to go to trial in early 2027.

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