The Federal Trade Commission and a bipartisan coalition of 22 states have filed a federal lawsuit against Amazon, alleging that the e-commerce giant illegally drove up costs for advertisers through secretive pricing maneuvers. According to the complaint filed in the Western District of Washington, Amazon systematically inflated the minimum bids required for product advertisements without notifying the businesses involved. The FTC claims these deceptive auction practices siphoned an estimated 20 billion dollars or more from advertisers to pad Amazon’s own profit margins.
In response to the allegations, Amazon issued a firm denial via a company blog post on Monday. The retail giant argued that its advertising strategies are designed solely to connect shoppers with the most relevant products and insisted there is no evidence of consumer harm. To defend its position, Amazon pointed out that the average cost per click for its advertisers has remained flat between 2019 and 2024, even as total sales generated from those ads continued to climb.
This legal battle comes at a precarious time for the company, which recently settled another major dispute with the FTC last September. In that instance, Amazon agreed to pay 2.5 billion dollars in fines and reimbursements after accusations that it misled customers into signing up for Prime subscriptions. As news of this latest antitrust action spread throughout the business community on Monday afternoon, investors reacted cautiously, sending Amazon shares down approximately 3 percent.