Overview
- The Federal Trade Commission filed suit on August 31, 2026, joined by attorneys general from 22 states, alleging Amazon extracted roughly $20 billion by secretly inflating ad prices.
- The complaint says Amazon began a 2019 practice of placing an internal 'soft reserve' bid and then often charged winners their full bids instead of only a cent above the second-highest bid.
- The FTC points to internal documents that mention a 'hidden surcharge' and alleges Amazon used simulated bidders and intervened in as many as 70–80% of auctions, with pay-per-click costs spiking about 50% on major shopping days.
- The agency says millions of advertisers were affected, including more than 500,000 small and medium businesses, and that higher ad costs were largely passed to U.S. consumers, according to FTC Chair Andrew Ferguson.
- Amazon has denied the allegations, saying its ad system saved advertisers about $8 billion from 2021–2025 and calling the suit misguided, and the case now moves into pretrial discovery where courts could order damages or changes to auction rules.