The FTC says Amazon rigged its own ad auctions, then billed advertisers for the difference, to the tune of $20 billion.
The FTC and 22 states sued Amazon yesterday, alleging the company secretly overcharged roughly 1.2 million advertisers by manipulating auction results since 2019. According to the complaint, Amazon told advertisers that competitive bidding set the price of Sponsored Products, Sponsored Brands, and Sponsored Display ads, then quietly overrode those results and substituted higher prices Amazon chose itself. The agency says its case rests on internal documents and messages uncovered during an investigation that began in 2024. Regulators estimate the scheme generated $20 billion in extra profit for Amazon over seven years.
This isn't just a pricing dispute, it's an allegation that Amazon's core promise of auction-based ad pricing was theater. Advertisers assumed competition set their bids; regulators say Amazon set the price first and let the auction take the blame. That's a direct hit to the credibility of the self-serve ad model Amazon sells to more than a million businesses.
Ad platforms sell advertisers on transparency in exchange for trust, and a rigged auction, if proven, is about the clearest way to break that bargain.