Amazon's Ad Auctions Under Fire: FTC Sues Over Alleged Price Manipulation

Amazon is facing increased regulatory pressure after the US Federal Trade Commission (FTC) and 22 states sued the e-commerce giant over allegations of manipulating advertising auctions to inflate prices for businesses.

The lawsuit claims Amazon secretly altered its ad auction system, introducing a 'soft reserve' that pushed up costs for advertisers. This allegedly generated tens of billions of dollars in additional revenue over several years.

Regulators argue the practices resulted in more than $20 billion in overcharges to around 1.2 million advertising customers. They also warn higher advertising costs could ultimately be passed on to consumers through higher product prices.