Amazon Accused of Rigging Ad System to Overcharge Businesses

North Carolina Attorney General Jeff Jackson has filed a lawsuit against Amazon, alleging that its advertising system overcharged more than 1.2 million businesses by over $20 billion since 2019.

The suit claims that Amazon secretly modified its bidding system in 2019 to increase charges without advertisers noticing. According to the complaint, Amazon would replace the second-highest bid with a higher bid created by the company, forcing winning advertisers to pay more.

Amazon's ad system uses a 'second-price auction,' but Jackson alleges that this has been manipulated to favor the tech giant at the expense of its customers. The lawsuit also states that Amazon tested how much it could raise charges without advertisers noticing.

Jackson is seeking to stop the practice, order Amazon to pay penalties, and refund advertisers who were overcharged. He warns that these added costs can lead to higher prices for everyday goods, including groceries, clothing, school supplies, medicine, and more.