FTC sues Amazon for secretly manipulating ad prices, reaping tens of billions over seven years

FTC Sues Amazon Over Secret Ad-Price Manipulation, Alleges Billions in Deceptive Gains

The Federal Trade Commission filed a lawsuit against Amazon in Seattle federal court Monday, alleging the e-commerce giant secretly manipulated the minimum prices advertisers must pay to promote products on its retail platform, generating tens of billions of dollars over seven years. The case, joined by more than 20 state attorneys general in a bipartisan coalition, represents the FTC's third major enforcement action against Amazon.

Amazon agreed to pay $2.5 billion last year to settle an earlier lawsuit over Prime subscription deception. A separate monopolization case against the company is headed to trial next year.

The lawsuit alleges Amazon deceived advertisers by raising minimum ad prices without transparency. The mechanism matters: as the intermediary between sellers and customers, Amazon controls both the auction pricing for ads and the visibility of competing products, creating what amounts to a tax on sellers dependent on the platform.

Brands that sell heavily on Amazon describe the ad platform as extractive. They report widespread frustration over what they characterize as a hidden fee structure, inadequate brand protection against counterfeit products using their keywords, and limited transparency around how pricing decisions are made. The case is premature to assess, but the FTC's framing suggests Amazon exploited information asymmetry—sellers had no way to know they were being systematically overcharged.