Federal Regulators Sue Amazon for Allegedly Overcharging Advertisers by $20 Billion
The Federal Trade Commission has filed a lawsuit against Amazon, accusing the e-commerce giant of using hidden surcharges to systematically overcharge advertisers on its platform. The complaint alleges that Amazon manipulated its pricing and auction systems without notifying advertisers, resulting in over $20 billion in excessive charges.
The lawsuit specifically targets sponsored products ads, brands ads, and display ads that appear alongside search results. According to officials, this scheme allowed Amazon to increase its revenue through undisclosed fees that affected advertisers.
The complaint, filed in the U.S. District Court for the Western District of Washington and joined by 22 states, highlights the impact of Amazon’s actions on millions of advertising customers who were misled into paying higher prices. These costs were ultimately passed on to American consumers.
FTC chairman Andrew N. Ferguson stated, “When one of the world’s largest online retailers engages in unfair and deceptive conduct, the impact can be staggering. Amazon has millions of advertising customers who were misled into paying significantly higher prices. These higher costs were largely passed on to American consumers. The FTC under President Trump won’t allow this deception to continue.”
Amazon is alleged to have profited over $20 billion from these practices since a rule change in 2019. The focus of the lawsuit is solely on the ad systems and does not extend to other services provided by the company.
In response to the lawsuit, Amazon released a blog post calling the FTC’s claims “misguided” and stating that the complaint “fundamentally misunderstands how advertisers operate.” The company asserts that it has provided advertisers with guidance on auctions and pricing in their campaign management tools and is prepared to defend its case in court.
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