The FTC and attorneys general from 22 states filed suit against Amazon on September 1, 2026, in federal court in Seattle, alleging the company secretly overcharged advertisers more than $20 billion since 2019 through manipulated ad auctions. The complaint says Amazon quietly replaced auction-determined prices for Sponsored Products, Sponsored Brands and Sponsored Display listings with an undisclosed "soft reserve price" designed to push costs higher without telling advertisers.
Regulators say roughly 1.2 million advertisers were affected, including more than 500,000 small and medium-sized businesses, and that the inflated costs were largely passed on to consumers through higher retail prices. California Attorney General Rob Bonta said Amazon "misrepresented how it calculates the cost of advertising on its platform," while New York Attorney General Letitia James said deceptive practices like this "hurt consumers and small businesses."
Amazon denies wrongdoing, arguing its inflation-adjusted cost-per-click held flat from 2019 to 2024 despite improved ad performance, and that its auction system saved advertisers roughly $8 billion between 2020 and 2025. Advertising brought in $68.6 billion for Amazon last year, and the case follows a separate $2.5 billion settlement over Amazon's Prime subscription practices in 2025.