The Federal Trade Commission has sued Amazon.com in Seattle, accusing the online bookshop of manipulating ad prices on its retail platform.
According to the Wall Street Journal the lawsuit, backed by more than 20 state attorneys general, claims Amazon secretly raised the minimum price businesses had to pay for product ads. The agency says the trick helped Amazon rake in tens of billions of dollars across seven years.
Amazon paid $2.5 billion last year to settle a Prime subscription case and faces a separate illegal monopolisation trial next year.
Amazon runs the world’s third-largest digital ad platform behind Google and Meta Platforms. It made $68 billion from ads in 2025, according to securities filings. The complaint alleges that advertisers suffered more than $20 billion in harm due to higher auction prices. Amazon shares closed down 2.5 per cent on Monday.
“These inflated advertising charges allow Amazon to extract additional revenue from sellers on its platform, on top of the account fees, referral fees, and fulfilment and storage fees that increasingly both cut into Amazon sellers’ profit margins and lead to price increases borne by Amazon shoppers,” the complaint said.
Amazon said it properly explained its auctions to advertisers and claimed its system set a “real-time minimum value” for each advert. The outfit said the idea was “common across the industry” and that advertisers never paid more than they bid.
Podean chief executive officer Travis Johnson said ad buyers were surprised, though Amazon’s ad machine still had plenty of pull for smaller sellers chasing sales. “We are aware and concerned when issues like this come up,” Johnson said.
The FTC claims Amazon began changing its auction strategy in 2018 by entering its own bid, internally called a “soft reserve”, to push up prices without telling merchants.
The lawsuit says Amazon ad executives tracked the “surcharge” and tried to keep the practice quiet.
One internal memo said, “the benefit to Amazon comes at the cost of advertisers”. The FTC says Amazon intervened in auctions to set prices 70 to 80 per cent of the time in recent years.
