SEATTLE – The Federal Trade Commission and a group of states today sued Amazon.com Inc. over claims it systematically overcharged advertisers by more than $20 billion since 2019.
The complaint, filed in U.S. District Court for the Western District of Washington in Seattle,, alleges that advertisers were misled by pricing and terms of the company’s so-called sponsored listings, which appear atop a web page when a user initiates a search on Amazon’s online marketplace.
“Over the years, Amazon has rigged billions of ad auctions, inflating Amazon’s profits at the expense of Americans who rely on Amazon’s advertising to generate business,” California’s attorney general Rob Bonta said in a statement. California is among the plaintiffs alleging that more 1.2 million advertising customers, including more than 500,000 small and midsized businesses, were misled by the way Amazon calculates the cost of advertising on its platform.
Amazon issued a statement saying that the company “strongly disagrees” with the notion that advertisers were misled.
"The FTC claims advertisers were harmed because they didn’t understand how our auction worked and therefore overpaid. Not only do we properly describe our pricing and auctions to advertisers, but this claim fundamentally misunderstands how advertisers behave,” Amazon said in the statement.
“Advertisers adjust bids based on real-world outcomes, not descriptions of auction mechanics," the statment said. "However, even if you accept the FTC’s flawed premise that advertisers keep their bids constant regardless of ad performance, we estimate that advertisers have saved over $8 billion from 2021 to 2025 as a result of Amazon incorporating ad relevancy into our auction versus selecting ads on bid alone.”
The FTC filed the suit after reviewing more than a million internal Amazon documents obtained through investigatory subpoenas. Investigators reviewed internal emails and chats showing widespread discussions about the impact of the alleged scheme, according to the agency, which enforces antitrust and consumer law.
The lawsuit is being led by the FTC and includes the attorneys general of Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina and Vermont.
Amazon faces a trial, tentatively set to start in early 2027, to settle claims that the company illegally monopolizes online retail markets. And the tech giant last year agreed to pay $2.5 billlion in penalties and refunds and change its process for how members cancel a Prime subscription to settle a lawsuit brought by the FTC.
