Federal regulators are suing Amazon for allegedly using hidden surcharges to secretly and systematically overcharge advertisers by more than $20 billion on its platform.
The Federal Trade Commission’s complaint alleges that the e-commerce giant manipulated its pricing and auction systems after a 2019 rule change without notifying advertisers.
The lawsuit targets sponsored products ads, brands ads and display ads that appear alongside search results.
Officials allege the scheme boosted Amazon’s revenue through undisclosed fees affecting advertisers.
The complaint was filed in U.S. District Court for the Western District of Washington and was joined by 22 states.
Says FTC chairman Andrew N. Ferguson,
“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 allegedly reaped more than $20 billion from these practices dating back to the auction rules change.
The suit focuses solely on the ad systems and does not reference other company services.
In a blog post, Amazon says the FTC’s lawsuit is “misguided” and that the complaint “fundamentally misunderstands how advertisers operate.”
“We’ve provided advertisers with guidance about our auctions and pricing in the main tools they use to manage their campaigns, and we continue to update that guidance. We look forward to making our case in court.”
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