Gokhan Ergocun
31 August 2026•Update: 31 August 2026
The US Federal Trade Commission (FTC) and 22 states sued Amazon for allegedly covertly inflating prices in online search advertising auctions.
The regulatory body stated that the company secretly increased prices for over seven years.
These undisclosed surcharges affected more than 1 million brands and sellers that advertised on the platform.
FTC Chairman Andrew N. Ferguson said the deceptive conduct of the online retailer had staggering impacts.
Ferguson noted that these higher costs eventually burdened American consumers.
The lawsuit claimed Amazon promised prospective advertisers a second-price auction system.
The company told advertisers that auction winners would pay only one cent more than the next-highest bidder.
Amazon actually charged Sponsored Products advertisers their own winning bid close to 80% of the time.
The percentage of time advertisers paid their exact bid amount increased from between 30% and 40% in 2021 to approximately 80% in 2024.
Internal documents revealed that the company created an invented auction participant to artificially increase prices.
Executives at the company acknowledged that this secret strategy served as an effective method to drive revenue.
Amazon actively concealed these changes from the public to avoid a massive backlash from advertising customers.
The commission filed the legal complaint in the US District Court for the Western District of Washington.
