FTC and 22 states sue Amazon, alleging secret inflation of ad prices

The Federal Trade Commission (FTC) and a coalition of 22 U.S. states filed a lawsuit against Amazon on September 1, 2026, accusing the e‑commerce giant of secretly inflating the prices advertisers pay on its platform and reaping what the complaint says could amount to tens of billions of dollars.

Alleged scheme in ad-auctions

According to the complaint, Amazon ran its advertising placements through auctions where, under the platform’s public rules, the winning bidder should pay one cent more than the second-highest offer. The FTC illustrates this with an example: if one firm bids $200 and a rival bids $190, the winner would owe $190.01.

The agency contends that, in practice, Amazon charged the full bid in nearly four out of five ad auctions instead of following that rule. The complaint further alleges that the company used fictitious bidders to push prices higher and that the practice was introduced after Amazon grew dissatisfied with revenues from its ad auctions.

FTC Chair Andrew Ferguson said the extra cost ultimately falls on American consumers and warned that the consequences can be severe when a dominant online retailer engages in unfair or deceptive conduct. The suit frames the conduct as a long-running, covert effort: the complaint says the price-raising scheme continued for more than seven years.

Amazon faces a coordinated enforcement action by federal and state authorities that, if successful, could lead to significant financial penalties and changes to how the marketplace runs its advertising business. The company has not commented in this article.

Photo: press material from the event