- The FTC and 22 states filed a lawsuit against Amazon in federal court, alleging that the company illegally raised prices for advertisers by secretly increasing the minimum price required to place ads.
- The lawsuit claims that Amazon began secretly manipulating its auction results in 2018 to increase ad prices, costing advertisers $20 billion or more.
- Amazon denied the allegations in a blog post, asserting that its advertising policies are fair and that the average cost per click for advertisers has remained flat from 2019 to 2024.
- Advertisers reportedly suffered billions in harm from higher ad prices, with the FTC stating that 1.2 million advertisers paid more than they realized due to Amazon's actions.
- Amazon's actions included a hidden surcharge and placing artificial bids, which allegedly allowed the company to extract over $20 billion from advertisers, many of whom were small or medium-sized businesses.
- The FTC claimed that these higher costs were eventually passed down to Amazon shoppers, indicating a broader impact on consumers.
The Federal Trade Commission (FTC) and 22 states have accused Amazon of illegally inflating advertising prices, claiming the company pocketed over $20 billion from advertisers.567
The lawsuit alleges that since 2018, Amazon manipulated auction results, raising minimum ad prices without informing advertisers, impacting around 1.2 million businesses, many of which are small or medium-sized.
“Amazon has been able to generate billions of dollars in profits — at the expense of its auction advertising customers,” the FTC stated.8
The FTC seeks civil penalties and aims to recover losses for advertisers, who reportedly suffered significant financial harm due to these inflated costs.
Amazon has strongly denied the allegations, asserting that its advertising costs have remained flat from 2019 to 2024. The company claims that advertisers saved over $8 billion from 2021 to 2025 due to its focus on ad relevancy.
In a statement, Amazon said, “The FTC’s claim fundamentally misunderstands how advertisers operate.” The company also noted that it shared data with the FTC but felt the agency was more focused on securing a monetary victory than engaging with the facts.
Despite the lawsuit, Amazon continues to dominate the e-commerce market, projected to generate $927.82 billion in worldwide retail sales this year, making it difficult for advertisers to leave the platform.
“Advertisers face a tough challenge because Amazon is incredibly hard to walk away from,” said Zak Stambor, an analyst at Emarketer.
“The FTC claims Amazon's alleged scheme cost advertisers $20 billion or more, affecting 1.2 million businesses, nearly half of them small or medium-sized. Amazon counters that its ad pricing remained flat from 2019 to 2024, and that prioritizing ad relevancy saved advertisers over $8 billion from 2021 to 2025.”
