Amazon Sued Over Alleged Advertising Price Manipulation

Amazon is facing another major lawsuit from federal regulators over its advertising prices. The Federal Trade Commission (FTC) and 22 state attorneys general have sued Amazon, alleging that it has been secretly and systemically overcharging advertisers on its platform.

The FTC claims that Amazon manipulated the bidding process for its ad auctions to increase prices, which resulted in tens of billions of dollars being pocketed by the company. The lawsuit alleges that Amazon deceived its customers and deprived them of the benefits of competition and fair dealing.

Amazon has responded to the lawsuit, arguing that the FTC misrepresented the reality of its ad auctions and cherry-picked findings. The company claims that the quality of its advertising improved over the years while the average cost-per-click of its ads remained flat when adjusted for inflation.

This is not Amazon's first major lawsuit from federal regulators. In 2023, the company paid $30 million to settle FTC allegations of privacy violations involving its voice assistant Alexa and doorbell camera Ring. Amazon has also faced a sweeping lawsuit by the FTC and 17 states that paints the company as a monopolist that suffocates competitors and raises costs for both sellers and shoppers.