Amazon may be staring down another costly fight with the Federal Trade Commission. Bloomberg reported that the FTC is preparing a potential lawsuit against the company over allegedly misleading advertising practices, with civil penalties likely on the table if the agency moves forward.
The investigation centers on whether Amazon adequately disclosed how its advertising auctions work, specifically around reserve pricing mechanisms and the terms offered to advertisers. In plain English: the FTC wants to know if Amazon was upfront with the businesses paying to advertise on its platform, or if it buried key details about how much they’d actually end up paying.
A pattern, not an incident
In September 2025, Amazon reached a $2.5 billion settlement with the FTC over its Prime subscription practices. That deal included a $1 billion civil penalty and $1.5 billion earmarked for consumer refunds. The settlement addressed complaints about how Amazon handled Prime sign-ups and cancellations.
Now, less than a year later, the agency is reportedly drafting a preliminary complaint on an entirely different front. The FTC has been actively overseeing Amazon’s business practices since at least 2023, and the advertising probe suggests the agency isn’t satisfied that past penalties have changed the company’s behavior in meaningful ways.
