On Monday, August 31, 2026, the Federal Trade Commission (FTC) along with prosecutors from 22 states filed a lawsuit against the e-commerce giant, Amazon, alleging that the platform would have been charging more than thousands of advertisers through hidden changes in its auction system.
In details of the lawsuit filed before the U.S. District Court in the West District of Washington by the states of Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont and Washington, it is stated that the unrevealed charges were applied over a seven-year period, costing its customers billions of dollars.
The FTC explained that since 2019, the company placed without notice to advertisers of its platform an internal charge called “soft reserve price”, which made many of its customers pay an 80% more of the main amount to access their advertising spaces.
The company estimates that this collection scheme by Amazon may have generated tens of billions of dollars, as more than 500,000 small and medium-sized enterprises are estimated to be affected.
In this regard, Andrew N. Ferguson, president of the FTC, said in a statement that when one of the world’s largest online retailers engages in unfair and deceptive practices, the impact can be devastating. “Amazon has millions of advertising customers who have been induced to pay significantly higher prices. These higher costs have largely been transferred to U.S. consumers,” he said.
North Carolina Attorney General Jeff Jackson also said Amazon has made enormous efforts in recent years to hide from its customers the fact that it inflates the prices of its alleged auctions.
Amazon, for its part, rejected the allegations by qualifying the lawsuit as “erroneous,” arguing first that the FTC does not have sufficient knowledge about how auctions work with its advertisers; in addition, it argues that between 2019 and 2025, product advertising auctions fell by 50%, ensuring that the average cost per advertisement remained stable in those years.
“Even by accepting the FTC’s mistaken premise that advertisers don’t adjust auctions, we estimate that they saved more than $8 billion between 2021 and 2025 as a result of Amazon prioritizing ad relevance over advertising selection based solely on auction price,” Amazon said in a statement.
