FTC and 22 States Sue Amazon Over Hidden Advertiser Surcharges
The Federal Trade Commission and 22 state attorneys general filed a lawsuit Monday against Amazon, alleging the company deceived more than 1.2 million advertisers by secretly inflating ad prices. The FTC claims Amazon manipulated its advertising auction system starting in 2018 and added hidden surcharges called soft reserve prices, potentially extracting over 20 billion dollars from advertisers over seven years. Amazon controls the third-largest digital ad platform globally, earning 68.6 billion dollars in advertising revenue in 2025. Amazon disputes the allegations, arguing the FTC misunderstands how advertising auctions work and that ad quality and advertiser savings increased during the period in question. The lawsuit centers on sponsored product ads, brand ads, and display ads. The case was filed in federal court in Washington state and marks the FTC's third major lawsuit against Amazon.
Key facts
- FTC and 22 state attorneys general filed lawsuit alleging Amazon overcharged 1.2 million advertisers with hidden surcharges since 2019
- FTC claims Amazon extracted over 20 billion dollars from advertisers through manipulation of sponsored products, brands, and display ads
- Amazon's advertising business earned 68.6 billion dollars in 2025, making it the third-largest ad platform globally
- Amazon claims its auction system saved advertisers 8 billion dollars between 2021 and 2025
- According to Wall Street Journal reporting, Amazon raised floor prices 70-80 percent of the time and increased pay-per-click costs by 50 percent on major shopping days
- Approximately 500,000 small and medium-sized businesses were among the 1.2 million affected advertisers
- This is the third major FTC lawsuit against Amazon; prior cases include 2.5 billion dollar Prime settlement and ongoing monopoly litigation
How different outlets framed it
Left-leaning coverage: Progressive outlets emphasize this as evidence of corporate malfeasance requiring strong regulatory action. They highlight that Amazon used deceptive practices to hide surcharges and that small and medium-sized businesses representing half the affected advertisers were particularly vulnerable. Coverage frames this as part of a broader pattern of anticompetitive behavior that harms competition and justifies aggressive antitrust enforcement.
Right-leaning coverage: Right-leaning outlets note this lawsuit even under Trump's FTC administration, suggesting serious concerns about Amazon's practices. Some emphasize the bipartisan nature of the state coalition and suggest Amazon's scale makes it difficult for small businesses to avoid the platform. However, coverage generally reflects skepticism toward regulatory overreach and presents Amazon's defense arguments prominently.
Limits of this briefing
Coverage focuses heavily on U.S. domestic regulatory perspectives and does not address international implications. The lawsuit represents allegations not yet proven in court, and Amazon's defense arguments about auction mechanics and advertiser savings deserve serious consideration pending litigation.
Sources
- CNN Business: FTC sues Amazon, alleging it overcharged advertisers Centre
- CNBC: FTC sues Amazon, accusing the e-commerce giant of misleading advertisers Centre
- NPR: The U.S. sues Amazon again Left
- Federal Trade Commission: FTC, States Sue Amazon Over Secret Ad Surcharge Scheme Centre
- Forbes: Amazon Facing FTC Lawsuit Over Secretly Raising Advertiser Prices Right