FTC and 22 States Sue Amazon Over Ad Price Manipulation

The Federal Trade Commission and 22 U.S. states filed a lawsuit against Amazon.com Inc. in a Seattle federal court on Monday, alleging the company systematically deceived advertisers by manipulating ad prices. The complaint claims that since 2018, Amazon used a soft reserve mechanism to secretly raise the minimum price for Sponsored Products, Sponsored Brands, and Sponsored Display listings by entering its own bids higher than the runner-up.

The FTC alleges this practice overcharged 1.2 million customers and generated more than $20 billion in illegal gains for Amazon over seven years. The lawsuit includes a bipartisan group of attorneys general from states including California, Florida, and New York.

Amazon denied the allegations, stating the lawsuit is based on a misunderstanding of its auction process. The company claims its auctions actually saved advertisers $8 billion through 2025. Amazon shares fell approximately 3% following the announcement. This legal action follows a $2.5 billion settlement the company reached last year regarding deceptive Prime subscription tactics.