GoKawiilFTC and 22 states sue Amazon over hidden ad auction surcharges
The Federal Trade Commission, joined by 22 states, filed suit against Amazon on Monday alleging the company secretly inflated prices in its Sponsored Products, Sponsored Brands and Display ad auctions for more than seven years. The complaint says Amazon told over 500,000 small and medium businesses they'd pay just a penny above the next-highest bid in a 'second-price' auction, but from 2019 quietly inserted a hidden 'soft reserve price' using a fabricated bidder to push winning advertisers to pay their full bid instead.
GoKawiil's interpretation of the reporting above, not reported fact.
If proven, the allegations suggest Amazon manipulated a system it publicly described as fair competition, effectively extracting extra revenue from over a million brands and sellers who trusted the auction mechanics. The case adds to mounting regulatory scrutiny of Amazon's advertising business, one of its fastest-growing and most profitable divisions, and could force changes to how it discloses ad pricing.
- FTC and 22 states allege Amazon secretly raised ad auction prices since 2019.
- A hidden 'soft reserve price' and fake bidder allegedly pushed advertisers to pay full bids instead of second-price rates.
- Over one million brands and sellers may have been affected, generating tens of billions in extra revenue for Amazon.
Source: techcrunch.com — Lauren Forristal, 2026-08-31
Published there as: “FTC accuses Amazon of running a ‘secret ad surcharge scheme’ in new lawsuit”
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