Amazon Hit with $20 Billion Advertising Scandal

Regulators have taken aim at Amazon's advertising machine, alleging that the e-commerce giant manipulated sponsored-product auctions and extracted more than $20 billion from over one million sellers and brands.

The Federal Trade Commission (FTC) and 22 states claim that Amazon changed the rules in 2019 and later interfered in as many as 80% of sponsored-product auctions, which generated $19.8 billion in revenue last quarter, a 26% surge from the previous period.

Amazon's stock price tumbled approximately 4.6% to $254.18 on Tuesday, trading 2.83% above its GF Value estimate of $247.18.

The company fired back, stating that average winning bids fell 50% between 2019 and 2025, while also arguing that the system saved advertisers roughly $8 billion.