Amazon Slammed with $20 Billion Ad Overcharge Allegations

Amazon's advertising business has come under fire from regulators as the Federal Trade Commission (FTC) and 22 states allege that Amazon overcharged sellers and brands by more than $20 billion.

The complaint claims that Amazon rigged sponsored-product auctions, changing the rules in 2019 and interfering in up to 80% of such auctions. This allegedly led to advertisers paying higher prices for ad space.

Amazon fired back with its own argument, stating that average winning bids fell by 50% between 2019 and 2025. The company also claims that the system saved advertisers around $8 billion.

The FTC's allegations add pressure to Amazon's advertising business, which generated $19.8 billion in revenue last quarter - a 26% surge from the same period last year. This accounts for nearly 10% of Amazon's total sales.

With its stock trading at $254.18, just 2.83% above its estimated value, Amazon has limited room for error as regulators scrutinize one of its fastest-growing businesses.