FTC Alleges Amazon Rigged Ad Auctions, Overcharged Advertisers

The Federal Trade Commission (FTC) and 22 U.S. states filed a lawsuit against Amazon yesterday, accusing the e-commerce giant of systematically overcharging advertisers through a secret scheme spanning seven years. The complaint alleges that Amazon manipulated the pricing auctions for advertisements on its platform.

According to the lawsuit, since 2019, Amazon has allegedly overridden actual auction results with higher prices set by the company. Advertisers reportedly believed that competitive auctions determined ad prices on Amazon's site. The FTC claims that internal documents and messages obtained during its investigation reveal how Amazon inflated prices for Sponsored Products, Sponsored Brands, and Sponsored Display ads.

The FTC's investigation into Amazon's advertising practices began in 2024. This lawsuit is part of a broader regulatory effort examining the market power and competitive practices of major technology companies in the United States. Amazon's advertising revenue is a significant and growing segment of its business.

The suit seeks to address what the FTC describes as a "secret scheme" to increase Amazon's profits by manipulating a core part of its advertising services. The outcome of the legal challenge could impact how online advertising auctions are conducted across the industry.