Amazon Faces $20 Billion Lawsuit Over Secret Ad Price Hikes

Amazon is facing a multi-state lawsuit led by New York Attorney General Letitia James and the Federal Trade Commission (FTC) alleging that the e-commerce giant secretly overcharged its advertising customers more than $20 billion between 2018 and 2025.

The lawsuit claims Amazon manipulated its auction system, which sets prices for ads on its website, by submitting fake second-place bids to inflate the prices advertisers pay. This scheme allegedly allowed Amazon to charge small and medium-sized businesses hundreds of thousands of dollars in excess fees, with more than 1.2 million advertisers affected.

According to the lawsuit, Amazon concealed this information from its customers, including its own marketing materials that claimed auction winners paid only a penny more than the next highest bid. The company allegedly prevented advertisers from seeing auction data to keep the inflated prices hidden and avoid damaging trust in the system.