It feels like déjà vu all over again.
The Federal Trade Commission (FTC) and 22 state attorneys general are suing Amazon, the commission announced Monday. The FTC claims Amazon’s ad platform introduced a change in late 2018 that allowed it to secretly inflate prices for Sponsored Product ads on its ecommerce site.
As a result of this change, the FTC estimates that Amazon squeezed the margins of ad auctions to extract about $20 billion in revenue since 2019.
Amazon denies the allegations and calls the FTC suit “misguided.”
Amazon claims “average winning bids fell 50% from 2019 to 2025 on Sponsored Products search ads, and roughly 92% of placed ads are not given to the highest bid.” The company added that advertisers have “saved over $8 billion from 2021 to 2025 as a result of Amazon prioritizing ad relevancy over selecting ads on bid price alone.”
