FTC Sues Amazon Over Alleged Ad Pricing Manipulation
The Federal Trade Commission (FTC) and attorneys general from 22 states have sued Amazon, alleging that it overcharged advertisers for years by manipulating its online advertising auction system. The lawsuit claims the company secretly added a 'soft reserve price' in 2019 to increase ad costs without informing businesses, potentially extracting tens of billions of dollars from more than one million advertisers—many small and midsize companies. Amazon denies wrongdoing, stating that it has used second-price auctions since launching its advertising service in 2006. The company claims the system evolved to prioritize ad relevance for shoppers rather than just selecting the highest bidder. Amazon also argues that winning bids have decreased significantly from 2019 to 2024 while costs per click remained stable after adjusting for inflation. The lawsuit does not currently allow advertisers to file a claim, and it is unclear whether or how they might recover funds if the case results in a settlement. The legal battle will now proceed through U.S. District Court.
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Topics: advertising pricing Amazon FTC lawsuit