Amazon Accused of Secretly Inflating Advertising Prices
Amazon is facing a lawsuit from the US Federal Trade Commission (FTC) and 22 states, alleging that the company secretly overcharged its advertising customers. The alleged scheme may have generated around $20 billion in revenue for Amazon since 2019.
The complaint alleges that Amazon manipulated online auctions used to determine ad prices, overriding actual auction outcomes with higher prices of its own choosing to increase profits.
Amazon rejected the claim that it misled advertisers and argued that average winning bids for Sponsored Products fell by 50% between 2019 and 2025. However, the FTC claims that consumers were harmed because advertisers passed on additional costs to them.
The dispute centers on second-price auctions for advertising space, where the winning advertiser expects to pay one cent more than the bid submitted by the second-highest bidder. The lawsuit alleges that Amazon charged its own winning bid in nearly 80% of auctions.