Amazon Disputes FTC Lawsuit Over Sponsored Ads as ‘Misguided’ and ‘Patently False’

The Federal Trade Commission, along with 22 states, has filed a lawsuit against Amazon alleging that the company engaged in deceptive and unfair practices by secretly inflating prices in its online search advertising auctions. According to the FTC, this alleged scheme has likely extracted tens of billions of dollars from unsuspecting advertising customers.

FTC Chairman Andrew N. Ferguson emphasized the significant impact on Amazon's millions of advertising customers, who were misled into paying higher prices that were ultimately passed on to American consumers.

However, Amazon has strongly disputed these allegations, calling the FTC's complaint "misguided" and "patently false." The company's blog post rebuttal states that the FTC misunderstands how advertisers operate, citing only a handful of communications to allege a company-wide effort to deceive. Amazon asserts that customers saved an average of $230 per year on essential products through deals, coupons, and the Subscribe & Save reorder program, and there was no advertiser harm.

The company further claims that the average cost-per-click for its Sponsored Products search ads remained flat adjusted for inflation from 2019 to 2024, while conversion rates grew by 24% from 2021 to 2025. Amazon cites the data, industry context, and evidence of how advertisers behave, along with information showing that its auction works as intended.

The company maintains that the FTC has shown little interest in engaging with the facts and is more focused on securing a substantial monetary victory. Amazon concludes that the evolution of its Sponsored Ads has been a journey toward better outcomes for everyone, providing sellers, relevant advertising for shoppers, and stronger sales performance for advertisers.