FTC sues Amazon, accusing the e-commerce giant of misleading advertisers

Key Points:

• The Federal Trade Commission (FTC), joined by 22 state attorneys general, sued Amazon alleging the company secretly overcharged advertisers by manipulating its pricing and auction systems, potentially earning over $20 billion from hidden surcharges since 2019.
• The lawsuit claims Amazon changed its auction rules without notice by adding an undisclosed "soft reserve price," leading to higher advertising costs, contradicting its previous "second-price" auction system promises.
• Amazon denied the allegations, calling the FTC's lawsuit "misguided" and stating it has provided advertisers with clear guidance, asserting its auction system has saved advertisers $8 billion between 2021 and 2025.
• The complaint focuses on Amazon’s sponsored product, brand, and display ads, highlighting concerns from third-party sellers about rising ad costs and recent policy changes that have sparked an advertiser boycott.
• The FTC seeks civil penalties, restitution, and damages, marking another regulatory challenge for Amazon following a $2.5 billion settlement last year over its Prime membership program.