FTC and 22 states sue Amazon, alleging ad-bid manipulation overcharged sellers

Amazon denies FTC allegations, says cost-per-click held flat

The Federal Trade Commission and 22 state attorneys general sued Amazon on Monday, alleging the company manipulated the bidding process that determines how much sellers pay to run ads on Amazon’s website and mobile app, and overcharged advertisers as a result. The bipartisan group of 22 state attorneys general — drawn from across the political spectrum — joined the federal agency in the case, which was filed in U.S. District Court in Washington.

According to the government’s complaint, Amazon has pocketed tens of billions of dollars by “secretly and systemically overcharging” advertisers on its platform. The complaint alleges that Amazon manipulated the bidding process for the ads to push up the prices that 1.2 million brands and sellers pay to advertise on Amazon’s website and mobile app.

The lawsuit argues that “in executing its scheme to misrepresent and rig its auctions against its customers, Amazon has deceived its customers and deprived them of the benefits of competition and fair and transparent dealing.”

Amazon disputed the allegations on Monday, calling the FTC’s case a misrepresentation of how its ad auctions operate and accusing the agency of cherry-picking findings. The company pointed to data showing that the average cost-per-click on its ads has remained flat when adjusted for inflation, and argued that the quality of its advertising placements has improved over time. Amazon also noted that the complaint offers no evidence of harm to shoppers, who do not pay for ads on the platform.

The new complaint is the third major federal action against Amazon. It joins a separate suit, brought by the FTC and 17 states, that paints the company as a monopolist that suffocates competitors and raises costs for both sellers and shoppers. That case is scheduled to go to trial early next year.

The lawsuit also comes just over a year after Amazon agreed to pay $2.5 billion to settle a separate federal case over its Prime membership program. In that matter, the government alleged that Amazon’s website designs had manipulated tens of millions of consumers into paying for subscriptions that were purposefully hard to cancel.

In 2023, Amazon also paid $30 million to settle FTC allegations that its Alexa voice assistant and Ring doorbell camera products had engaged in privacy violations.

Advertising has grown into one of Amazon’s largest and fastest-expanding businesses. Over 2025, the segment earned the company almost $69 billion, and it grew by 26 percent in the most recent quarter. The auction format Amazon uses to sell ads is fairly common in the industry.