The Federal Trade Commission is gearing up to sue Amazon over allegations that the company misled advertisers about how its ad auctions actually work. The complaint, which could be filed in the coming weeks, focuses on how Amazon disclosed terms, pricing, and reserve pricing in its search advertising and sponsored listings businesses.
If the case moves forward and results in penalties proportional to the alleged misconduct, Amazon could be staring down billions in civil fines. For a company that generated $68.6 billion in advertising revenue last year, that’s not pocket change.
What the FTC is actually alleging
The investigation, which began as a consumer protection probe in 2025, zeroes in on transparency problems in Amazon’s advertising machinery. Specifically, regulators are scrutinizing how the company communicated auction mechanics to the advertisers bidding for placement on its platform.
The FTC’s concern is that Amazon may not have been upfront about reserve pricing — the minimum price Amazon sets before it will show an ad at all.
