FTC And States Sue Amazon Over Secret Ad Surcharge Scheme
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What happened
On Monday, the U.S. Federal Trade Commission and attorneys general from 22 states filed a lawsuit against Amazon in U.S. District Court for the Western District of Washington, alleging the company secretly overcharged more than one million advertisers. The complaint says that after a 2019 change, Amazon added an undisclosed “soft reserve price” so that in auctions it had described as charging winners only one cent more than the next-highest bid, it instead charged winners their own bid about 80 percent of the time, a practice regulators estimate may have yielded more than $20 billion. They seek civil penalties, restitution, and other damages. Amazon called the suit misguided, said the FTC “fundamentally misunderstands how advertisers operate,” and stated that average winning bids on Sponsored Products search ads fell 50 percent from 2019 to 2025 and that its systems saved advertisers more than $8 billion from 2021 to 2025.
Omitted — what each side leaves out
Unpacked
Right-leaning coverage omits Amazon's savings claim, so a $20 billion overcharge stands with no offset; left-leaning coverage prints the counter. The overcharge story in the NY Post never includes Amazon's claim that those customers came out ahead. CNBC reports the company's estimate of $8 billion in advertiser savings. Readers who see only the first account get uncontested overcharging; readers who see the second get a fight over the books.
Right-leaning coverage flags that shopper harm is not the legal test; left-leaning coverage treats Amazon's shopper-price denial as the answer to the suit. A law professor speaking to the NY Post says buyer harm is "not required" to win. CNBC reports Amazon's claim that the complaint lacks evidence of consumer price increases and stops there.
What did Amazon's campaign tools actually tell advertisers about how a winning price was set?
Bottom line
Amazon's $8 billion savings claim runs in CNBC and not in the NY Post. That is why one version of this lawsuit is a dispute over the math and the other is straight overcharging.
The receipts — 6 facts one side's coverage lacks
- Amazon said its auctions saved advertisers $8 billion from 2021 to 2025
- Amazon said roughly 92% of placed ads are not given to the highest bid
- Regulators allege some 500,000 small and medium-size businesses were among the victims
- Amazon said that after reviewing about 1.5 million pages the FTC leans on a handful of simplified communications
- An Amazon executive discussed dialing up reserve prices on Black Friday 2024 because revenue came in under plan
- The complaint alleges pay-per-click ad cost rose 50% on major shopping days
The Left View
Left-leaning outlets frame the case as Amazon having “secretly and systematically overcharged” advertisers, with FTC Chair Andrew Ferguson saying customers “were misled into paying significantly higher prices” that “were largely passed on to American consumers.” CNBC and the BBC lean on complaint citations of internal messages—an executive allegedly acknowledging an “invented auction participant” used to raise prices, and the claim Amazon acted because it was “unhappy about how much revenue its advertising auctions were generating.” They treat the gap between promised second-price rules and actual charges as deception of advertisers with downstream harm to shoppers, note third-party sellers’ criticism of surging ad costs including a merchant ad-spend boycott, and present Amazon’s “misguided” rebuttal as company pushback rather than an answer to the consumer-harm claim.
The Right View
The New York Post casts the filing as a “bombshell” in which Amazon “cheated” and “bilked” advertisers by “stealthily placing its own bids” to raise the auction floor without competitors knowing. It stresses concealment—“no notice” and “affirmative steps to conceal”—names some 500,000 small and medium-size businesses among those affected, and reports an alleged Black Friday 2024 discussion of “dial[ing] up” reserve prices after revenue “came in under” plan. It also gives Amazon’s defense prominent space: after reviewing about 1.5 million pages, the FTC “leans on a handful of simplified communications” Amazon calls “patently false,” and the company says consumers were not harmed. A Vanderbilt antitrust scholar is quoted saying harm to shoppers “is not required for the FTC to win,” because the alleged injury is to advertisers; a former FTC chair called the bipartisan state coalition “a good sign.”
Our Take (balanced)
The enforcement-side case, as left-leaning coverage presents it, is strongest on alleged intent and concealment: internals about a hidden reserve and an “invented” bidder, set against a public second-price promise, with Ferguson tying extra ad costs to shoppers. Right-leaning coverage’s strongest complementary points are the claimed hit to hundreds of thousands of smaller sellers and Amazon’s counter that the FTC, after a huge document haul, relies on “a handful of simplified communications,” plus falling winning bids and claimed advertiser savings that, if credited, undercut a simple overcharge story. The central unresolved tension is whether advertisers paid more because they were misled about auction mechanics (and whether any extra cost reached consumers), or whether they bid on observed return so the undisclosed “soft reserve” did not produce the overcharge the suit describes—and whether consumer prices even have to be part of the injury.
6 sources
- FTC sues Amazon, accusing the e-commerce giant of misleading advertisers
- Amazon rigged $20bn worth of ad prices, US lawsuit alleges
- Amazon rigged billions in ad pricing, lawsuit from states and US watchdog alleges
- Amazon secretly inflated ad prices, the FTC and 22 states allege in a lawsuit
- Bombshell suit claims Amazon cheated advertisers out of billions by secretly manipulating ad prices
- FTC and 22 states sue Amazon over alleged secret ad surcharge scheme
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