The FTC, joined by 22 state attorneys general, has sued Amazon for allegedly running a secret scheme since 2019 to manipulate its advertising auctions, causing approximately 1.2 million advertisers to overpay by more than $20 billion. The lawsuit claims Amazon covertly imposed hidden surcharges on top of standard auction results, overriding the competitive "second price" auction system it publicly advertised, while keeping even its own sales staff unaware of the practice. Amazon has denied wrongdoing, arguing its reserve pricing system reflects true market value, that average ad costs remained flat when adjusted for inflation, and that the FTC selectively used a small number of internal documents to misrepresent its practices.
