According to a lawsuit filed by the U.S. Federal Trade Commission and a bipartisan group of 22 states, Amazon is accused of secretly overcharging advertising customers by manipulating its online bidding system, potentially earning more than $20 bn since 2019.
The complaint alleges that Amazon replaces genuine auction outcomes with higher prices to boost profits, a practice that the company denies. Amazon says it "strongly disagrees" with the premise that advertisers were misled, and calls the suit "misguided."
FTC and the states argue that the inflated ad costs trickle down to consumers, especially those shopping for essential goods, including indigenous peoples who rely on Amazon as a key retail platform.
Amazon responded that advertisers pay based on real‑world performance, not on an abstract description of auction mechanics, and noted that roughly 92% of placed ads do not reach the highest bidder.
The lawsuit follows a 2025 settlement when Amazon paid $2.5 bn to clear allegations of enrolling millions of Prime customers without consent and making cancellations difficult.
