Amazon sued by FTC, 22 states over advertising practices
The Federal Trade Commission and 22 state attorneys general are suing Amazon for allegedly hiding over $20 billion in advertising auction overcharges. The lawsuit claims Amazon used an undisclosed soft reserve price for seven years to push costs above competitive bidding levels, affecting more than 1.2 million customers. Amazon denies the claims, calling the lawsuit misguided and asserting its practices saved advertisers $8 billion. The company is defended by Gibson, Dunn & Crutcher and Dunn Isaacson Rhee.
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- ✓ The FTC and 22 states allege Amazon hid over $20 billion in advertising overcharges.
- ✓ More than 1.2 million advertising customers were affected by the alleged practices.
What changed
Recent reports confirm the involvement of 22 state attorneys general in the FTC's legal action.
Live updates
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FTC and 22 states sue Amazon for $20 billion in advertising overcharges
The Federal Trade Commission and 22 state attorneys general are suing Amazon for allegedly hiding over $20 billion in advertising auction overcharges. The lawsuit claims Amazon used an undisclosed soft reserve price for seven years to push costs above competitive bidding levels, affecting more than 1.2 million customers. Amazon denies the claims, calling the lawsuit misguided and asserting its practices saved advertisers $8 billion. The company is defended by Gibson, Dunn & Crutcher and Dunn Isaacson Rhee.
Why it matters
This case targets the transparency of Amazon's digital ad auction system. If proven, the use of secret price floors would indicate a systemic inflation of costs for a massive volume of business advertisers.
What is confirmed
- The FTC and 22 states allege Amazon hid over $20 billion in advertising overcharges.
- More than 1.2 million advertising customers were affected by the alleged practices.
What to watch next
- Court rulings on the admissibility of the soft reserve price evidence
- Amazon's formal legal response to the specific overcharge calculations
confidence 100%Sources used for this update (5)
- www.yakimaherald.com — Do You Qualify for Any of September’s Class Action Settlements?
- cryptobriefing.com — FTC alleges Amazon hid overcharges to advertisers in lawsuit backed by 22 states
- www.adweek.com — Retail Roundup: Amazon's $20 Billion Lawsuit, and Commerce Media’s First Upfronts
- www.techrepublic.com — Powerful AI, Cyberthreats, and Industry Upheaval Define This Week in Tech
- bmmagazine.co.uk — Apple faces £2bn UK lawsuit over app tracking rules
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FTC and 22 States Sue Amazon Over Alleged Ad Price Manipulation
The Federal Trade Commission and 22 states filed a lawsuit against Amazon alleging the company secretly inflated digital advertising prices for over seven years. The complaint claims Amazon used an undisclosed soft reserve price to raise costs above competitive bidding levels, resulting in more than $20 billion in overcharges for approximately 1.2 million advertising customers. Amazon has rejected the allegations, calling the action misguided and claiming its practices have saved advertisers $8 billion. The company is represented by Gibson, Dunn & Crutcher and Dunn Isaacson Rhee.
Why it matters
Amazon's advertising business is a high-margin sector that significantly impacts the costs brands and sellers pay to reach customers. This legal challenge targets the transparency of the online auction system used to place sponsored ads. The case involves state attorneys general from Illinois, Indiana, Pennsylvania, and Maryland, among others.
What is confirmed
- The FTC and 22 states sued Amazon for allegedly inflating advertising prices.
- The lawsuit alleges Amazon used an undisclosed soft reserve price to raise auction costs.
- The alleged overcharges exceed $20 billion and affected about 1.2 million customers.
- The deceptive pricing practices reportedly lasted for more than seven years.
- Amazon has denied the allegations and labeled the lawsuit misguided.
What to watch next
- Court rulings on Amazon's motion to dismiss the allegations
- Evidence presented regarding the specific mechanics of the soft reserve price
- Potential settlements between Amazon and the 22 participating states
confidence 100%Sources used for this update (24)
- WSJ — Exclusive | FTC to File Lawsuit Alleging Amazon Deceived Advertisers
- The New York Times — F.T.C. and 22 States Claim in Lawsuit That Amazon Secretly Inflated Ad Prices
- CNN — FTC sues Amazon, alleging it overcharged advertisers
- Yahoo Finance — FTC Lawsuit Puts Amazon’s (AMZN) High-Margin Advertising Business in Focus
- wsj.com — How Amazon’s ‘Secret’ Ad Pricing System Worked, According to the FTC
- NBC News — Amazon sued by FTC, 22 states over advertising practices
- The Economist — World in Brief: The Iran war turns hot again; Xi and Putin meet
- BBC — Amazon rigged billions in ad pricing, lawsuit from states and US watchdog alleges
- KCRA — Federal Trade Commission and 22 states sue Amazon over inflated advertising prices
- finance.yahoo.com — FTC Lawsuit Puts Amazon’s (AMZN) High-Margin Advertising Business in Focus
- www.searchenginejournal.com — FTC Sues Amazon Over Alleged $20 Billion Advertising Surcharge Scheme
- www.outlookbusiness.com — FTC, 22 US States Sue Amazon Over Alleged $20 Bn Ad Auction Manipulation
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