FTC Sues Amazon for $20B in Alleged Ad Price Manipulation

Amazon's shares slipped on Tuesday after the Federal Trade Commission (FTC) filed a lawsuit alleging the company overcharged advertisers by roughly $20 billion and manipulated ad auctions.

The firm, Citi, sees this pullback as a 'buying opportunity' and maintained its 'Buy' rating and $350 price target on Amazon's shares, implying potential upside of over 37% from Monday's close.

Amazon rejected the FTC's claims, calling the lawsuit 'misguided' and saying it 'strongly disagrees' with the allegations surrounding its sponsored advertising pricing and auction process.

Citi pointed to continued advertiser spending on Amazon, saying marketers are allocating more money to the platform based on the results they generate. The firm also flagged improving artificial-intelligence (AI) demand at Amazon Web Services (AWS).