The Federal Trade Commission and 22 states sued Amazon yesterday, alleging that it has conducted a secret scheme to overcharge advertisers for seven years. But, in reality, Amazon overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits.” The FTC said it obtained internal documents and messages that reveal how Amazon secretly inflated auction prices for Sponsored Products, Sponsored Brands, and Sponsored Display advertisements that appear alongside results seen by consumers when they search for a product. The FTC investigation began in 2024.
The FTC lawsuit was joined by a bipartisan group of 22 state attorneys general from Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington. The lawsuit said Amazon has conducted “billions of rigged auctions,” imposing “hidden surcharges on advertisers almost every time a shopper clicks on an advertisement on the Amazon website. Amazon’s deception continues to this day” and deprives customers “of the benefits of competition and fair and transparent dealing,” the FTC said.
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