Amazon Faces FTC Lawsuit Over Alleged Ad Price Manipulation
The US Federal Trade Commission (FTC) has filed a lawsuit against Amazon alleging that the company has been secretly overcharging advertisers on its platform. The complaint claims that Amazon has been manipulating its advertising auctions since 2019, resulting in higher prices for ads and ultimately costing advertisers over $20 billion.
According to the FTC, Amazon's advertising organization 'Amazon Ads' set and charged customers higher prices for ad placements after running the auctions. This meant that winning bidders paid more than they would have if the price had been determined by the auction alone.
The FTC claims that this practice has likely extracted over $20 billion from advertisers since 2019. Amazon responded to the lawsuit, saying that the FTC's claim 'fundamentally misunderstands how advertisers behave.' The company also disputed the claim that higher ad prices were passed on to consumers, pointing out that the average winning bid for Sponsored Products search ads fell 50% between 2019 and 2024.