Amazon is sued by the FTC and 22 states for 'secretly' overcharging advertisers since 2019
ThinkingNews Desk · how this was written
The Federal Trade Commission and 22 state attorneys general have filed a lawsuit accusing Amazon of secretly and systematically overcharging advertisers on its retail platform with hidden surcharges since 2019. The complaint alleges that the scheme has resulted in more than $20 billion in excess charges to advertisers.
Written from all 4 reports below, not from any single one.
How it was reported
- TechMeme·Sources: the FTC and 20+ state AGs plan to sue Amazon for allegedly making tens of billions over seven years by manipulating ad prices on its retail platform (Dave Michaels/Wall Street Journal)
The Federal Trade Commission and more than 20 state attorneys general have filed a lawsuit accusing Amazon of inflating advertising costs on its retail site, alleging the company extracted tens of billions of dollars in excess fees over a seven-year period. The complaint alleges Amazon used its platform dominance to manipulate ad pricing, violating antitrust and consumer-protection laws.
- TechMeme·The FTC and 22 state AGs sue Amazon, alleging it "secretly and systematically overcharged" advertisers more than $20B since 2019 by using "hidden surcharges" (Annie Palmer/CNBC)
The U.S. Federal Trade Commission and 22 state attorneys general have filed a lawsuit accusing Amazon of secretly and systematically overcharging advertisers more than $20 billion since 2019 through hidden surcharges on its Sponsored Ads platform, with the excess costs allegedly passed to consumers. Amazon contends the FTC’s complaint provides no evidence of consumer price increases or advertiser harm and mischaracterizes how its advertising system operates.
- TechCrunch·FTC accuses Amazon of running a ‘secret ad surcharge scheme’ in new lawsuit
The FTC and 22 states allege Amazon covertly altered its Sponsored Products, Sponsored Brands and Display ad auctions in 2019, adding a hidden “soft reserve price” and a fabricated bidder that turned a marketed second-price auction into a first-price sale. The scheme purportedly affected over 1 million brands, generating tens of billions of extra revenue from advertisers who were told they would pay only a cent above the next highest bid.
- The Verge·FTC lawsuit alleges Amazon has been ‘secretly and systematically’ overcharging for ads
The FTC and 22 state attorneys general claim Amazon added a concealed “ad surcharge” that raised advertising fees for sellers, passing the cost to consumers. They allege the company violated the FTC Act and numerous state laws by employing “second-price” auctions where winners paid only a cent more than the next highest bid. This action follows Amazon’s recent $2.5 billion settlement with the FTC over Prime subscription practices.
- Engadget·Amazon is sued by the FTC and 22 states for 'secretly' overcharging advertisers since 2019
The FTC and 22 states allege Amazon has secretly added hidden surcharges to its ad auctions since 2019, inflating rates and extracting over $20 billion from advertisers. Internal documents cited in the complaint show employees aware of undisclosed reserve prices that boost short-term revenue but could harm long-term interests. Amazon denies the claims, asserting the lawsuit lacks evidence of consumer price impacts and misinterprets its auction system.