FTC Sues Amazon Over Alleged Advertising Price Manipulation for $20 Billion

The Federal Trade Commission (FTC) has filed a lawsuit against Amazon.com Inc AMZN, accusing the e-commerce giant of manipulating advertising prices and deceiving advertisers.

The lawsuit claims that Amazon unlawfully profited $20 billion from unsuspecting advertisers, impacting around 1.2 million U.S. advertisers, including over 500,000 small and medium-sized businesses.

Amazon's current Price-to-Sales (P/S) ratio is significantly above its historical median, indicating that earnings-based valuation metrics like P/E do not apply due to the company's cash-flow-negative status.