Amazon sued by FTC, 22 US states over advertising practices

The U.S. Federal Trade Commission (FTC) has filed a lawsuit against Amazon.com in federal court, alleging that the company illegally raised prices for advertisers by secretly increasing the minimum bid required for ads promoting their products. The FTC, along with a coalition of 22 U.S. states, claims that Amazon systematically inflated auction prices for advertisers without their consent, resulting in losses of up to $20 billion for advertisers.

The advertising dispute centers on sponsored products, brand and display ads that appear alongside search results. According to the FTC, Amazon sometimes placed its own bids in the auctions, raising prices for competitors while concealing those bids. As a result, consumers paid higher prices for Amazon's goods, and the states can seek civil penalties to recover some of the losses.

Amazon denies the allegations, stating that its advertising policies aim to show users the most relevant ads and that the average cost per click for advertisers remained stable from 2019 to 2024, while sales generated from those clicks grew.