FTC Alleges Amazon Secretly Inflated Advertising Auction Prices for Years
The Federal Trade Commission (FTC) and 22 state attorneys general have filed a lawsuit against Amazon, alleging that the company secretly inflated prices in its search advertising auctions over seven years. The complaint claims Amazon executives concealed this practice to avoid damaging advertiser trust, as internal documents suggest they were aware of potential backlash. Amazon's ad business is one of the largest digital platforms behind Google and Meta, generating nearly $70 billion in revenue by 2025. According to the FTC, these practices affected over a million brands and generated tens of billions for Amazon’s bottom line. The agency claims that hidden surcharges were added within second-price auctions (GSPs), causing advertisers to pay more than expected. Amazon has denied wrongdoing, stating in a blog post that costs per click remained stable when adjusted for inflation between 2019 and 2024 while conversion rates improved. The company argues the FTC's allegations misrepresent how advertising bids function.
Topics: advertising Amazon auction manipulation FTC retail media