Amazon sued by FTC and over 20 US states

The U.S. Federal Trade Commission, alongside a coalition of 22 American states, has filed a lawsuit against Amazon alleging the company illicitly inflated minimum advertising prices, costing advertisers billions. This misconduct, according to the FTC, transpired from changes introduced to Amazon's auction rules in 2019. The deceptive practice allowed Amazon to surreptitiously join online ad auctions, inflating costs for competitors without their knowledge, thereby earning billions in profit at the expense of its advertising customers.

The lawsuit, filed in a federal court in Washington state, asserts that approximately 80% of sponsored products auctions saw some level of intervention by Amazon. The FTC, seeking tens of billions in damages, argues that Amazon's actions led to higher ad prices for consumers, while the states may pursue civil penalties and recover some of the losses.

The agency maintains that Amazon's alleged actions contradict the company's claim of providing the lowest prices for consumers and ensuring competitive retail and grocery prices. Amazon has denied the allegations, maintaining that its advertising policies aim to display the most relevant ads and that average winning bids for sponsored products search ads have fallen by 50% since 2019.

Despite this, Amazon's ad sales increased by 26% in the second quarter of 2025, reaching $68.6 billion. The company's share price dipped by approximately 2.5% following the lawsuit announcement.