FTC Sues Amazon Over Alleged Ad Price Fixing Scheme

The Federal Trade Commission (FTC) and 22 state attorneys general have filed a lawsuit against Amazon, alleging that the company secretly inflated prices paid by advertisers on its retail platform through undisclosed changes to its advertising auction system.

According to the complaint, Amazon engaged in deceptive and unfair practices that affected more than 1 million brands and sellers. The FTC said the alleged conduct involved more than 500,000 small and medium-sized businesses that bought advertising placements on Amazon's website and mobile app.

The lawsuit centers on Amazon's Sponsored Products, Sponsored Brands, and Display Ads, which appear alongside search results when consumers search for products on Amazon. Merchants bid for placement tied to specific keywords, with ads awarded to the highest-ranked bidder.

Amazon may have extracted more than $20 billion from advertisers through the practice, the FTC said. The share of Sponsored Products auctions in which advertisers paid their own bid rose from between 30 percent and 40 percent in 2021 to 70 percent in 2022 and about 80 percent in 2024.

Amazon rejected the lawsuit, calling it 'misguided' and saying the complaint 'fundamentally misunderstands how advertisers operate.' The company also said that its auction systems saved advertisers $8 billion between 2021 and 2025, rather than costing them extra.