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FTC lawsuit alleges Amazon has been ‘secretly and systematically’ overcharging for ads
The Verge • • business
Key Points:
- The FTC and 22 state attorneys general have sued Amazon, alleging it used a "secret ad surcharge" to inflate advertising prices on its website and app, violating the FTC Act and multiple state laws.
- The lawsuit claims Amazon manipulated its "second price" ad auctions since 2019 by replacing the auction-determined price with a higher, profit-maximizing price, potentially extracting over $20 billion from advertisers.
- FTC Chairman Andrew Ferguson stated that these inflated ad costs were largely passed on to American consumers, increasing prices for goods advertised on Amazon.
- Amazon denies the allegations, calling the lawsuit "misguided" and highlighting a 50% decline in average winning bids for Sponsored Products search ads from 2019 to 2024, while disputing that higher ad prices affected consumers.
- This lawsuit follows a previous FTC settlement where Amazon agreed to pay $2.5 billion over Prime subscription practices, indicating ongoing regulatory scrutiny of the company.
