FTC Lawsuit Sends Amazon Stock Reeling Amid Advertising Price Manipulation Allegations

Amazon's stock price dropped by nearly 1.8% on Tuesday due to an antitrust lawsuit filed by the US Federal Trade Commission (FTC) and 22 US states against the e-commerce giant.

The FTC alleges that Amazon manipulated advertising auction prices, potentially costing advertisers $20 billion or more. According to the agency, Amazon systematically inflated advertising prices without advertisers' knowledge.

Amazon has pushed back against the accusations, stating that its advertising system is designed to improve ad relevance for shoppers. However, the company's growing reliance on advertising revenue has raised concerns among investors.

Analysts remain bullish on Amazon's underlying business, citing strong advertiser spending and continued growth in AWS infrastructure demand. Citi maintains a 'Buy' rating and $350 price target for Amazon, while Evercore ISI recently raised its price target to $355 after a positive US Online Retail survey.