Amazon Sued by FTC Over Alleged Secret Ad Price Hikes

The Federal Trade Commission (FTC) and 22 states have filed a lawsuit against Amazon alleging that it has been secretly upcharging companies for ads on its marketplace.

The complaint claims that over seven years, Amazon inflated the prices of promotions for marketplace sellers and brands, extracting excess ad revenue totaling in the tens of billions of dollars.

According to the FTC, Amazon misrepresented its auction practices, telling prospective advertisers that it runs 'second price' auctions, but in reality, charged Sponsored Products advertisers their own winning bid nearly 80 percent of the time.

The lawsuit also alleges that Amazon has been using a 'soft reserve price' since 2019, which has resulted in advertisers shelling out far more than the price determined at auction.