Amazon allegations over $20 bn in ad price rigging

The U.S. Federal Trade Commission and a bipartisan coalition of 22 states filed a lawsuit on Monday accusing Amazon of secretly overcharging its advertising clients through manipulation of its online auctions. According to the complaint, the company has been able to generate an estimated $20 bn in extra revenue from advertising customers since 2019.

The suit claims that Amazon has overridden auction results, replacing the true auction price with a higher figure set by the company, thereby boosting its profits. Amazon’s statement to the press expresses strong disagreement with the premise that it misled advertisers, calling the case “misguided.”

Beyond advertisers, the FTC and states argue that consumers have also been harmed because the additional costs are ultimately passed on in retail prices. Amazon’s own figures show a reduction in average winning bids for Sponsored Products from 2019 to 2025, and about 92% of placed ads are not awarded to the highest bidder.

The company’s stock closed 2.5 % lower after the lawsuit was reported. Amazon’s previous interactions with the FTC include a settlement last year over the alleged enrollment of Prime members without consent and costly steps to cancel subscriptions, which cost the company $2.5 bn in penalties and refunds.

The lawsuit also highlights claims that Amazon’s own winning bids were taken up to 80 % of the time, contrary to the advertised “second‑price” auction model.

Further details and updates will be closely monitored as the case proceeds.