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FTC and states sue Amazon over alleged overcharging for ads
The complaint alleges Amazon since 2019 overcharged 1.2 million advertising customers through inadequate disclosures tied to sponsored listings.
The US Federal Trade Commission and 22 state attorneys general filed a lawsuit against Amazon.com Inc., alleging the company systematically overcharged advertisers for years through its sponsored advertising products, including Sponsored Products, Sponsored Brands and Sponsored Display.
According to the complaint filed in federal court in Seattle, Amazon failed to provide adequate disclosures about pricing and terms tied to “sponsored” listings shown prominently in marketplace search results, and the regulators allege that since 2019 Amazon “secretly and systematically overcharged” 1.2 million advertising customers.
The FTC and states said the matter could result in billions of dollars in civil penalties, and noted the case follows an investigation that ramped up last year and focuses in part on whether Amazon properly disclosed ad pricing and related terms.
Amazon, in an emailed statement, said the lawsuit reflects a misunderstanding of how its advertising auctions work, adding that its auctions prioritize product relevance to search terms before bid amounts, it said prices have stayed down for advertisers. The company also said the average cost-per-click for its search ads remained flat when adjusted for inflation from 2019 to 2024, while advertising performance increased, and that its auctions saved advertisers $8 billion over the five-year period ending in 2025, not cost them extra, according to Amazon.