The US Federal Trade Commission (FTC) and the attorneys general of 22 states sued Amazon, accusing the company of increasing advertising prices on its website and app by imposing a “hidden surcharge.” FTC Chair Andrew Ferguson said rising advertising costs were largely passed on to American consumers. The complaint alleged that Amazon had violated the FTC Act and more than a dozen state laws. The lawsuit was filed approximately one year after Amazon agreed to pay $2.5 billion to resolve a previous FTC case concerning its Prime subscription practices.
According to the FTC, Amazon has been manipulating advertising auctions since 2019. Under the “second-price” system, the winning bid should be only one cent higher than the second-highest bid, but Amazon Ads was raising the price after the auction in a way that increased its own profits. The complaint stated that the practice may have extracted more than 20 billion dollars from customers. Amazon called the allegation “misguided”; it said the average winning bid for Sponsored Products search ads fell 50% between 2019 and 2024 and rejected the claim that the costs were passed on to consumers.
Why it matters
The case brings before the courts the question of whether Amazon’s pricing methods in the advertising market are merely a commercial choice or a practice that violates competition and consumer protection rules. The investigation raises, in particular, the extent to which the fees Amazon charges advertisers comply with auction rules and whether these costs are reflected in product prices. For this reason, the proceedings concern not only businesses that use Amazon’s advertising service but also consumers who pay the prices of products on the platform. Amazon’s rejection of the allegations places at the center of the case questions about how changes in advertising costs should be measured and how the consequences of the company’s pricing decisions should be assessed. The new filing, which follows the previous FTC case, expands the legal process the company is facing with regulatory authorities.
Background
Amazon is not a new name in the FikirPilot archive: we have published 2 news reports mentioning the name in the last 90 days; the most recent is dated 31 August 2026.