FTC Sues Amazon Over Alleged Advertising Price Manipulation

Amazon has fallen victim to a lawsuit from the US Federal Trade Commission (FTC) over allegations of manipulating advertising prices on its platform. The FTC claims that Amazon secretly increased the minimum price advertisers had to pay for promotions, resulting in tens of billions of dollars in losses for businesses.

The complaint alleges that Amazon began changing its auction strategy in 2018 by inserting its own bid into some auctions through a mechanism called a 'soft reserve'. This allegedly set the advertising price above what it would have been without the reserve, increasing the amount paid by merchants. The FTC claims that Amazon had visibility over competing bids but did not disclose this practice to advertisers.

Amazon has rejected these allegations, stating that its auctions operate transparently and that improvements to its advertising technology increase ad relevance and value for businesses. The company maintains that its system establishes a 'real-time minimum value' based on the worth of an advertisement, ensuring that advertisers never pay more than their submitted bids.

The FTC's lawsuit is not Amazon's first run-in with regulatory bodies. The company has faced separate lawsuits over alleged monopolistic practices and customer misrepresentation. With estimated advertising revenue reaching $68 billion in 2025, this latest action adds to the growing pressure on Amazon.