Amazon Faces $20B Ad Auction Manipulation Lawsuit from FTC, 20 States
The Federal Trade Commission and attorneys general from 20 states have filed a lawsuit against Amazon.com, Inc. over allegations that the retail giant has been secretly inflating digital advertising prices.
The complaint accuses Amazon of manipulating auctions for its search-based 'Sponsored Ads' placements between 2012 and 2026, resulting in an estimated $20 billion in overcharges for roughly 1.2 million advertisers.
According to the lawsuit, Amazon started overriding actual auction results around late 2018 and charging higher, algorithmically generated rates known as 'soft reserve' prices or 'surcharges.'
The system allegedly drove the 'first-price rate', the share of clicks where advertisers paid their full maximum bid, from 4% in 2020 to near 80% for Sponsored Products by 2024.