Amazon Sued for $20 Billion in Alleged Ad Price Manipulation

New York State has joined a coalition of 22 states and the Federal Trade Commission (FTC) in a lawsuit against Amazon, alleging that the e-commerce giant overcharged its advertisers more than $20 billion since 2018.

The suit claims that Amazon manipulated its ad auction system to artificially drive up prices for ad space on its website. Over 1.2 million businesses and small- to medium-sized companies were affected by these practices, with around 500,000 of them being overcharged.

New York State Attorney General Letitia James said in a statement that 'businesses depend on Amazon to reach their customers, and they deserve fair prices for ads.' She added that the increased prices paid by businesses impacted consumers too, who are likely paying more for everyday items such as groceries and electronics due to Amazon's deceptive practices.

Amazon responded to the lawsuit by stating that it sets its ad prices through an auction process where potential advertisers submit blind bids. The company claimed that winning bidders pay only 1 cent higher than the second-place bidder, but James' office disputes this, saying that Amazon secretly added a false second-place bid price to artificially drive up costs.