FTC and States Accuse Amazon of Inflated Ad Prices

The Federal Trade Commission (FTC) and 22 states have filed a lawsuit against Amazon, accusing the company of inflating ad prices for its advertisers. The complaint alleges that Amazon secretly inserted its own 'soft reserve' bids into ad auctions starting in 2018, driving up prices by 50% on big shopping days.

The regulators say that advertisers were misled and suffered billions in harm due to Amazon's actions. The states could seek civil penalties and restitution as a result of the alleged misconduct.

Amazon pushed back against the lawsuit, stating that its ad system is designed to show consumers the most relevant ads and that average cost-per-click remained flat between 2019 and 2024 despite increasing sales from those ads. The company also claimed that its pricing benefits consumers.