FTC Sues Amazon Over Alleged Ad Auction Manipulation
The Federal Trade Commission (FTC) has filed a lawsuit against Amazon, alleging that its ad platform secretly inflated prices for Sponsored Product ads on its ecommerce site. The FTC claims Amazon's change in 2018 allowed it to extract about $20 billion in revenue since 2019 by manipulating the ad auction process.
Amazon denies the allegations and calls the FTC suit 'misguided.' The company argues that average winning bids fell 50% from 2019 to 2025 on Sponsored Products search ads, and roughly 92% of placed ads are not given to the highest bidder. However, multiple media buyers and buy-side experts who spoke to AdExchanger were not satisfied by Amazon's explanations.
'The idea of Amazon manipulating a second price auction to artificially bid up to the buyer's max bid is reminiscent of what we saw in the Google Search antitrust case,' said one former media buyer. 'It again begs the question: Why does the ad industry accept auction mechanics that are devoid of financial audit mechanisms to validate they are functioning as claimed and not being manipulated by the company selling the media?'