Amazon secretly inflated ad prices, the FTC and 22 states allege in a lawsuit

Live updates

1. 12d ago

   FTC and 22 States Sue Amazon Over Ad Prices

   The Federal Trade Commission and 22 states filed a federal lawsuit accusing Amazon of secretly inflating prices for online search advertisements. Regulators claim the company used undisclosed surcharges and covertly raised minimum pricing requirements while assuring advertisers that auctions followed a second-price model. The enforcement action targets ad placements across Sponsored Products, Sponsored Brands, and Sponsored Display formats. Sellers have allegedly absorbed over $20 billion in excess fees since 2019.

   Why it matters

   The lawsuit opens a major regulatory front against Amazon's monetization practices within its dominant e-commerce ecosystem. Advertisers rely heavily on search placements to reach consumers on the platform, making auction transparency central to fair marketplace competition. Attorneys from Dunn Isaacson Rhee and Gibson, Dunn & Crutcher have stepped in to represent Amazon as the company confronts the multi-state antitrust litigation.

   What is confirmed

   • The U.S. Federal Trade Commission and 22 states filed a lawsuit against Amazon alleging the company illegally raised advertising prices.
   • Regulators allege Amazon used undisclosed surcharges and raised minimum pricing requirements while claiming its auctions used a second-price model.
   • The legal challenge involves Sponsored Products, Sponsored Brands, and Sponsored Display ads appearing on Amazon search results and product pages.
   • Attorneys from Dunn Isaacson Rhee and Gibson, Dunn & Crutcher are representing Amazon in the case.

   Still unconfirmed

   • The lawsuit raises questions for advertisers globally, including in South Africa.

   What to watch next

   • Amazon's formal legal response and motion to dismiss in federal court
   • Potential decisions by federal judges regarding preliminary injunctions or discovery timelines
   • Additional states potentially joining the federal and multi-state complaint
   Sources used for this update (7)

   1. www.mytotalretail.com — Amazon Sued by FTC, 22 US States Over Ad Sales Practices
   2. themediaonline.co.za — FTC and 22 US states sue Amazon over alleged secret advertising price inflation
   3. www.techspot.com — The FTC says Amazon secretly overcharged sellers by $20 billion in ad fees
   4. abc7chicago.com — Illinois, Indiana among 22 states and FTC to sue Amazon over inflated advertising prices
   5. massmarketretailers.com — FTC and 22 states sue Amazon over ad auction pricing
   6. www.law.com — FTC, 22 States Sue Amazon Over Alleged 'Secret Surcharge' Scheme in Online Ad Auctions
   7. www.tristatealert.com — FTC, Pennsylvania, and MD sue Amazon over alleged “secret ad surcharge scheme”
   confidence 100%
2. 14d ago

   FTC and 22 states sue Amazon over alleged $20 billion ad pricing scheme

   The US Federal Trade Commission and 22 states have sued Amazon, alleging the e-commerce giant secretly inflated ad prices, costing advertisers over $20 billion since 2019. The complaint claims Amazon used an 'invented auction participant' to drive up prices for advertising placements and sponsored product spots. Amazon rejects the claims.

   Why it matters

   This lawsuit is part of a broader effort to regulate big tech companies and protect consumers and advertisers. The alleged scheme involves Amazon's use of a secret pricing system to inflate ad prices. The company faces growing scrutiny over its business practices.

   What is confirmed

   • Amazon is being sued by the FTC and 22 states over allegations it secretly inflated ad prices.
   • The alleged scheme has cost advertisers over $20 billion since 2019.
   • Amazon used an 'invented auction participant' to drive up prices for advertising placements and sponsored product spots.

   Still unconfirmed

   • Amazon's 'secret' ad pricing system replaced actual ad-auction results with higher prices set by Amazon.

   What to watch next

   • Amazon's official response to the lawsuit
   • The FTC's evidence for the alleged $20 billion in damages
   • The court's decision on whether to proceed with the case
   Sources used for this update (10)

   1. The New York Times — F.T.C. and 22 States Claim in Lawsuit That Amazon Secretly Inflated Ad Prices
   2. wsj.com — How Amazon’s ‘Secret’ Ad Pricing System Worked, According to the FTC
   3. BBC — Amazon rigged billions in ad pricing, lawsuit from states and US watchdog alleges
   4. The Washington Post — Amazon secretly inflated ad prices, the FTC and 22 states allege in a lawsuit
   5. wcvb.com — FTC and 22 states sue Amazon, alleging it overcharged advertisers
   6. arstechnica.com — FTC alleges Amazon illegally made $20 billion by rigging billions of ad auctions
   7. www.ttnews.com — Amazon faces FTC lawsuit over sponsored ad pricing
   8. www.dailyitem.com — Feds and 22 states — including Pennsylvania — sue Amazon, alleging deceptive advertising scheme
   9. www.rivieraradio.mc — Amazon sued over alleged $20 billion advertising surcharge scheme
   10. www.wbap.com — Paxton, FTC Sue Amazon, Allege Hidden Ad Fees Cost Businesses Billions
   confidence 95%