Amazon Accused of $20 bn Ad Price Manipulation in New FTC Suit

Sun Sep 06 2026 01:30:03 GMT+0000 (Coordinated Universal Time)

FTC and 22 states allege Amazon secretly overcharged advertisers, inflating $20 bn in ad revenue since 2019, sparking a high‑stakes lawsuit and a sharp dip in Amazon shares.

The Federal Trade Commission and a bipartisan group of 22 states have filed a lawsuit against Amazon, alleging that the company secretly overcharged uploading advertisers by manipulating online auction mechanics. The complaint claims Amazon has netted more than $20 bn, or £14.8 bn, from advertising customers since 2019, and that these inflated costs are being passed onto consumers. Amazon’s response calls the case “misguided” and insists it misinterprets how its advertising auctions actually work. The suit follows a previous FTC settlement that saw Amazon pay $2.5 bn for alleged cheating of Prime customers.

Amazon Accused of $20 bn Ad Price Manipulation in New FTC Suit

The Federal Trade Commission (FTC) and a bipartisan coalition of 22 states filed a lawsuit on Monday, alleging that Amazon secretly overcharged advertisers by manipulating the auction process it uses to set ad prices. The complaint claims the scheme has yielded more than $20 bn (£14.8 bn) in over‑payments to Amazon since 2019.

According to the complaint, Amazon “overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits.” In a statement to the BBC, Amazon “strongly disagrees” with the allegations and calls the suit “misguided.” The company also says the FTC “fundamentally misunderstands how advertisers operate.”

The lawsuit also contends that the inflated ad costs are ultimately passed onto shoppers, resulting in higher product prices. It argues that consumers are suffering as a result and that Amazon’s actions have harmed the broader marketplace.

Amazon’s advertising ecosystem relies on Sponsored Product and Sponsored Brands ads that appear when shoppers search relevant keywords. The ads are conventionally sold through “second‑price” auctions, where bidders pay one cent more than the next highest bidder for each win. The complaint alleges that Amazon secretly charged around 80% of the time to its advertisers at their own winning bid.

Amazon pointed to a steep decline in average winning bids—down 50% from 2019 to 2025—and emphasized that roughly 92% of placed ads were not awarded to the highest bid. The company says those metrics demonstrate the advertising system’s viability and negate the FTC’s claims.

Shares in Amazon fell 2.5% after the lawsuit’s announcement. The move comes after Amazon’s own history with FTC investigations, most notably a $2.5 bn settlement over the alleged enrollment of Prime customers without consent and the subsequent difficulty in canceling that service.

The outcome of the litigation remains uncertain, with the FTC and the related states poised to pursue settlement or court judgment. Stakeholders and advertisers alike will watch closely as to whether Amazon’s advertising claims need to be re‑examined under new regulatory scrutiny.

Amazon logo at office