Amazon Sued Over Alleged Ad Cost Inflation Scheme

The Federal Trade Commission (FTC) and attorneys general from 22 states have sued Amazon, alleging that the company used artificial bids to inflate costs for advertisers. The complaint claims that Amazon created an 'invented auction participant' to drive up prices for advertising placements on its online store.

According to the lawsuit, this scheme has been ongoing for more than seven years, affecting over a million brands and sellers. The FTC alleges that Amazon charged prices 'beyond what [can] be achieved through advertiser competition,' resulting in tens of billions of dollars in revenue for the company.

'Amazon has millions of advertising customers who were misled into paying significantly higher prices,' said FTC Chairman Andrew Ferguson. 'These higher costs were largely passed on to American consumers.'