Amazon Faces FTC Lawsuit Over Alleged Ad Price Manipulation

The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, alleging that the company 'secretly and systematically overcharged' advertisers on its platform.

The complaint, filed in U.S. District Court for the Western District of Washington, claims Amazon may have pulled in more than $20 billion from advertisers through hidden surcharges dating back to 2019.

According to the FTC, Amazon used a 'second-price' auction system that told advertisers they'd only pay the minimum bid needed to win. However, the company allegedly added an undisclosed 'soft reserve price' in 2019, pushing ad costs higher without telling advertisers.

FTC Chairman Andrew Ferguson stated that millions of advertisers were misled into paying more, and that 'these higher costs were largely passed on to American consumers.'