FTC Sues Amazon Over Alleged Ad Price Manipulation
The Federal Trade Commission (FTC) and 22 states have filed a lawsuit against Amazon, accusing it of deceiving businesses by overcharging prices to advertise on its platform. According to the complaint, Amazon raised the minimum price for advertisers without their knowledge, resulting in 1.2 million businesses paying more than they realized.
The FTC claims that Amazon's auction system was manipulated to increase ad prices, with the company likely extracting over $20 billion from advertisers between 2018 and 2023. Almost half of these advertisers were small or medium-sized businesses, which may have had their costs passed down to customers.
Amazon has responded to the lawsuit, stating that it 'strongly disagrees' with the claims and that the FTC's understanding of its advertising system is flawed. The company estimates that advertisers saved over $8 billion between 2021 and 2025 due to Amazon prioritizing ad relevancy over bid price.
The latest lawsuit is just one of several major cases against Amazon, including a $2.5 billion settlement with the FTC last year over allegations of deceptive Prime subscription practices.