Overview
- The Federal Trade Commission is preparing to file a lawsuit that alleges Amazon misled advertisers by failing to disclose key details of its ad-auction mechanics.
- Regulators are focused on reserve pricing, the minimum price Amazon sets before an ad can be shown, and say its use was not adequately disclosed to advertisers.
- Multiple state attorneys general are reported to be joining the FTC, creating a coordinated enforcement effort rather than a solely federal action.
- Amazon’s ad business generated $68.6 billion last year, so any multibillion-dollar fine or rules forcing changes to auction practices could hit revenue and advertiser costs.
- This action follows a September 2025 $2.5 billion FTC settlement over Prime practices and comes as the commission conducts similar scrutiny of other major ad platforms.