Business & Finance
FTC and 22 states sue Amazon over alleged ad auction manipulation
Regulators allege the company secretly inflated ad pricing by billions, while Amazon denies the claims as misguided.
The short version
- The Federal Trade Commission and 22 states filed a lawsuit alleging Amazon manipulated online ad auctions to overcharge advertisers.
- Regulators estimate the practice generated about $20 billion in extra revenue since 2019, impacting over 1.2 million advertising customers.
- Amazon pushed back against the claims, arguing that average winning ad bids actually dropped by 50% between 2019 and 2025.
Key facts
- The FTC and a bipartisan group of 22 states filed a lawsuit against Amazon in the U.S. District Court in the Western District of Washington.[BBC News · Associated Press]
- The lawsuit alleges Amazon inflated auction prices and defrauded over 1.2 million advertising customers.[BBC News · Associated Press]
- The complaint claims Amazon overrode second-price auction mechanics to charge Sponsored Products advertisers their own maximum bid roughly 80% of the time.[BBC News]
- Amazon strongly rejected the allegations, stating that the FTC relied on simplified communications and fundamentally misunderstood advertiser behavior.[BBC News · Associated Press]
- Amazon stated that average winning bids on Sponsored Products search ads fell 50% between 2019 and 2025.[BBC News]
- Following the legal filing, Amazon shares fell 2.5% on Monday.[BBC News]
What remains uncertain
- The extent to which higher advertiser costs were directly passed along to online consumers remains disputed between regulators and Amazon.[BBC News]
- The total financial liability and ultimate legal outcome remain uncertain as proceedings in federal court begin.[BBC News · Associated Press]