FTC Sues Amazon Over Alleged Ad Price Manipulation Scheme
Amazon.com Inc (NASDAQ:AMZN) shares are falling on Tuesday after the Federal Trade Commission announced a lawsuit against the company. The FTC claims Amazon ran a hidden pricing scheme inside its own advertising marketplace for over seven years, affecting more than a million businesses.
The agency alleges that Amazon's bidding system was not as transparent as it seemed, with the company quietly building in an extra charge starting in 2019. This led to advertisers paying inflated rates, with some estimates suggesting they paid nearly 80% of their bid by 2024.
Amazon has pushed back against the FTC's claims, arguing that neither shoppers nor advertisers were harmed and pointing to its own pricing data as evidence. The company says its bidding structure guarantees an advertiser never pays above their own bid and that the FTC's complaint fails to produce evidence of increased consumer prices.