FTC and 22 states sue Amazon over alleged secret ad surcharge scheme
Regulators allege that sellers and brands were overcharged by tens of billions of dollars through secretly inflated ad prices.
The Federal Trade Commission and 22 US states have joined forces to sue Amazon over allegations of a secret ad surcharge scheme allegedly costing customers tens of billions of dollars. The lawsuit centers on Amazon's use of second-price auctions, where sellers were purportedly charged only one cent more than the second-place bidder for advertising keywords.
However, the FTC claims that Amazon charged the winners their own price about 80% of the time, raising costs for businesses. When queried, Amazon stated that winning bid prices for sponsored product ads had dropped by 50% between 2019 and 2025, disputing the FTC's claims. The company argued that advertisers adjust their bids based on real-world performance, not auction mechanics.
Internal Amazon documents suggest employees discussed increasing prices, hoping advertisers wouldn't notice. The lawsuit alleges that Amazon concealed the inflated charges from customers, gradually increasing them as the company grew more confident in its deceptive practices.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
