FTC Sues Amazon Over Alleged Ad Price Manipulation

The Federal Trade Commission (FTC) is planning to file a lawsuit against Amazon over allegations of manipulated advertising pricing practices. The case will be filed in a Seattle federal court and will accuse Amazon of deceiving advertisers by secretly raising the minimum price they had to pay for ads on its retail platform.

The alleged manipulation occurred over a seven-year period, starting from 2018, when Amazon began entering its own bid into auctions as a 'soft reserve,' which was higher than the runner-up bidder's price. This practice raised the ad prices and Amazon reportedly earned a significant 'surcharge' from it.

The FTC will also claim that Amazon's executives tracked this surcharge and sought to limit how much others knew about it, initially deploying the strategy only on popular shopping days when companies would think higher ad rates resulted from intense competition for shoppers' attention.