FTC Slams Amazon with $20 Billion Advertising Price Fixing Suit

Amazon's stock plummeted 2.5% on Monday after the Federal Trade Commission (FTC) and 22 US states sued the company over its advertising practices.

The lawsuit alleges that Amazon secretly inflated advertising prices, extracting more than $20 billion from advertisers since 2019, which is believed to have affected over 1.2 million customers.

The FTC claims that Amazon's system of auctions for ad placement is not transparent and that the company inserted undisclosed prices into these auctions, effectively charging winners more than genuine competition required.

Amazon disputes this interpretation, stating that its adjustments saved advertisers $8 billion from 2021 through 2025, and that average winning search-ad bids fell by about 50% between 2019 and 2024.