Amazon rigged billions in ad pricing, lawsuit from states and US watchdog alleges

The US Federal Trade Commission (FTC) and 22 states have filed a lawsuit accusing Amazon of rigging billions in ad pricing through secret manipulation of online auctions used to set ad prices. According to the lawsuit, filed on Monday, Amazon has allegedly overcharged more than a million advertising customers by charging them close to 80% of the time the winning bid amount in "second price" auctions.

The FTC claims that this scheme has likely generated over $20 billion in profits for Amazon since 2019. The complaint states that Amazon's actions are driven by its dissatisfaction with the revenue generated by its advertising auctions. Amazon denies the allegations, stating that it "strongly disagrees" with the premise that it misled advertisers and called the lawsuit "misguided." The company's shares fell 2.5% following the announcement of the lawsuit.