U.S. regulator, 22 states accuse Amazon of 'manipulating' ad auctions in lawsuit

The US Federal Trade Commission (FTC) and 22 states have filed a lawsuit against Amazon, accusing the company of manipulating online ad auctions to overcharge more than 1.2 million customers by a combined $20 billion. The complaint, filed in a federal court in Washington state, alleges that Amazon has been systematically overcharging its advertising customers by secretly altering auction results.

Amazon has called the lawsuit "misguided" and "flawed," stating that regulators have cherry-picked outdated internal documents. California Attorney General Rob Bonta stated that Amazon has rigged billions of ad auctions. The lawsuit targets three specific advertising products: Sponsored Products, Sponsored Brands, and Sponsored Display.

Based on internal documents, the complaint claims that Amazon's scheme has likely extracted over $20 billion from unsuspecting advertising customers. The filing alleges that Amazon began manipulating auction results in 2018, giving customers no notice and taking steps to conceal the change. This is the third major lawsuit filed by the FTC against Amazon.

In September 2025, Amazon agreed to pay $2.5 billion to settle allegations of deceptive practices related to Amazon Prime subscriptions and cancellation. A trial is scheduled to begin next year in a case accusing Amazon of illegally maintaining a monopoly in online retail. Amazon generated $68 billion in advertising revenue alone last year, with total revenue reaching nearly $717 billion in 2025.

Amazon is the third-largest digital advertising provider globally, behind Google and Meta. Despite Amazon's claims, the lawsuit is a bipartisan effort, with both Democrats and Republicans involved. Texas Attorney General Ken Paxton also filed a separate case against Amazon for rigging its advertising auctions. Since 2020, federal regulators, including the Department of Justice, have launched multiple competition lawsuits against tech giants, with mixed results.

The FTC sued Meta in 2020 over its acquisition of WhatsApp but later dropped the case after a federal judge dismissed it in November 2025. The FTC has also filed an appeal of the decision.