Amazon Faces $20bn Ad‑Price Scam Lawsuit

Sun Sep 06 2026 04:06:48 GMT+0000 (Coordinated Universal Time)

FTC, 22 states accuse Amazon of secretly inflating ad bids, overcharging advertisers – $20bn loss since 2019.

In a fresh federal complaint, the US Federal Trade Commission, joined by a coalition of 22 states, accuses Amazon of secretly inflating ad bids and overcharging advertisers, allegedly netting $20 billion since 2019. Amazon denies the allegations, calling the suit "misguided." The lawsuit also claims the extra cost is passed on to shoppers, hurting consumers. This move follows a $2.5 billion FTC settlement over problematic Prime subscriptions.

Amazon Faces $20bn Ad‑Price Scam Lawsuit

FTC, 22 states accuse Amazon of secretly overcharging advertisers for its Sponsored Product and Sponsored Brand ads, netting an estimated $20 billion since 2019.

The lawsuit says Amazon "overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits." The claims also point out that the extra cost is ultimately passed on to shoppers, hurting consumers.

Amazon replied that it "strongly disagrees" with the premise that it misled advertisers and called the suit "misguided." It also cited a previous $2.5 billion FTC settlement over Prime subscription enrollment.

The complaint alleges Amazon secretly charged advertisers nearly 80% of the time with its own winning bid, rather than following typical second‑price auction mechanics. Amazon counters that its platform is fair, citing a 50% drop in average bids between 2019 and 2025 and that 92% of placed ads are not the highest bid.

The lawsuit also brings consumer harm to the forefront, stating that the increased ad costs will eventually raise prices for shoppers. Amazon’s shares fell about 2.5% after the filing.

This lawsuit highlights growing scrutiny on tech giants over market dominance and opaque pricing mechanisms that could impact competition.