FTC, 22 states sue Amazon over ad auctions tied to $20 billion
Why it matters: Regulators claim hidden surcharges since 2019 raised costs for 1.2 million advertisers and may have flowed through to shoppers.
The Federal Trade Commission and 22 state attorneys general sued Amazon on Monday, accusing the company of rigging ad auctions on its marketplace and overcharging advertisers by more than $20 billion. The complaint, filed in federal court in Washington state, alleges Amazon changed its auction rules in 2019 by adding an undisclosed “soft reserve price” that pushed up what brands and sellers paid for sponsored product, brand and display ads. Regulators say about 1.2 million advertisers were misled. Amazon rejected the case as misguided, arguing the FTC misunderstands its auction system and has not shown shoppers paid higher prices. Advertising brought Amazon more than $68 billion last year.