Amazon Hit With FTC Lawsuit Over Alleged Advertising Price Inflation

The Federal Trade Commission (FTC) and 22 states have filed a lawsuit against Amazon, alleging that the e-commerce giant has been inflating prices in its online search advertising auctions. The coalition claims that for seven years, Amazon added a surcharge to the second-place bid, driving up the final price paid by the winning business.

The plaintiffs' claims range from federal concealment and deceptive practice violations to state-specific consumer protection laws. They also accuse Amazon of manipulating an already 'opaque process,' making it difficult for businesses to understand how much they are paying for ad space.

California Attorney General Rob Bonta stated that Amazon went to 'great lengths to conceal the unlawful scheme' and generated more than $68 billion a year as the world's largest digital advertising company. He added that Amazon's price inflation is 'illegal, plain and simple.'

Amazon responded by calling the lawsuit 'misguided,' claiming that the FTC relied on simplified communications to make allegations of a companywide effort to deceive.