In brief
The FTC and a bipartisan group of 22 states have filed a lawsuit against Amazon, alleging the company secretly manipulated online auctions to inflate ad prices by $20 bn over the past four years. Amazon’s own advertising platform, which offers Sponsored Product and Sponsored Brand ads, allegedly overrides auction results and charges advertisers their own winning bid instead of the next highest bid. The company disputes the claims, calling the lawsuit misguided and stating it doubts the FTC’s premise. Share prices fell 2.5 % after the allegations were released, reflecting investor concerns.
Amazon allegedly overcharged over a million advertising customers by manipulating its online auction system, the lawsuit claims, accumulating a proposed $20 bn profit since 2019.
The FTC and a bipartisan coalition of 22 states filed the complaint to highlight Amazon’s alleged practice of replacing real auction results with higher, company‑set prices.
Amazon stated it "strongly disagrees" with the accusations, calling the suit "misguided" and asserting it did not mislead advertisers.
Both the FTC and states argue that the inflated ad costs have imposed higher prices on consumers, causing significant harm.
In its defence, Amazon explained that advertisers adjust bids based on real‑world performance and not auction mechanics. It noted average winning bids dropped 50 % from 2019 to 2025 and that roughly 92 % of placed ads were not awarded to the highest bid.
Amazon’s history of contention with the FTC includes a $2.5 bn settlement that addressed allegations of enrolling consumers into Prime subscriptions without consent and complicating cancellation processes.
