Amazon is facing a new federal showdown, this time over how it charges companies to reach its shoppers. The Federal Trade Commission and a bipartisan group of 22 states sued the company on Monday, accusing it of covertly boosting the minimum bids needed to run product ads, driving up auction prices, and allegedly extracting more than $20 billion from 1.2 million advertisers, Reuters reports. The complaint alleges Amazon secretly inserted its own "soft reserve" bids into ad auctions starting in 2018, driving up prices 50% on big shopping days, reports the Wall Street Journal.
- "When one of the world's largest online retailers engages in unfair and deceptive conduct, the impact can be staggering," said FTC Chairman Andrew Ferguson, per the AP. "Amazon has millions of advertising customers who were misled into paying significantly higher prices."
Regulators say advertisers were kept in the dark and suffered billions in harm; the states could seek civil penalties and restitution. Amazon pushed back in a blog post, calling the lawsuit "misguided." Amazon argued that its ad system is designed to show consumers the most relevant ads and that average cost-per-click, adjusted for inflation, remained flat between 2019 and 2024 even as sales from those ads climbed. The company also insisted its pricing benefits consumers. Amazon's stock slipped about 2.5% after the lawsuit was filed. Amazon, which generated $68 billion in ad revenue in 2025, already faces an antitrust case over alleged monopolization and previously paid $2.5 billion to resolve claims it misled customers about Prime subscriptions.
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