FTC sues Amazon over alleged inflation of online advertising prices

The U.S. Federal Trade Commission has accused Amazon of quietly driving up the price advertisers pay to place products alongside search results. The agency, joined by a bipartisan group of 22 states, filed the lawsuit in federal court in western Washington state.

The FTC alleges that Amazon raised the minimum price required for ads and sometimes entered its own bids in advertising auctions, ostensibly pushing up prices for other marketers. The complaint says Amazon attempted to conceal those bids from advertisers and that the resulting conduct cost them $20 billion or more.

The case covers sponsored-product, brand and display advertisements. Online auctions take place in fractions of a second after a shopper enters a search term, as marketers’ computer systems bid for placement. According to the complaint, Amazon intervened in as many as 80% of sponsored-product auctions.

“

Amazon has been able to generate billions of dollars in profits at the expense of its auction advertising customers.

The FTC said advertisers suffered billions of dollars in harm from higher prices. It also alleged that companies passed some of those costs on to consumers through higher prices for goods sold on Amazon. An agency official said the FTC would seek “tens of billions” in damages, although the precise amount has not been determined.

Amazon denied wrongdoing in a blog post. The company said its advertising policies are designed to show shoppers the most relevant ads and argued that the average cost per click stayed flat from 2019 to 2024, while sales generated from those clicks rose.

“

Tens of billions