FTC Sues Amazon Over Rigged Ad Prices

FTC Sues Amazon Over Rigged Ad Prices

The News

The Federal Trade Commission sued Amazon on Monday, alleging the company manipulated ad auction prices and misled advertisers about how its pricing system worked for roughly seven years.

More than 20 state attorneys general, from both parties, joined the suit.

At the center of the case is a mechanism the FTC calls a "soft reserve" — an internal bid Amazon allegedly placed in its own ad auctions to push up what merchants paid, without telling them. FTC officials say the practice raised minimum ad prices 70% to 80% of the time.

Amazon shares fell on the news. The company took in $68 billion in digital advertising revenue in 2025.

Timeline

2018

The alleged scheme begins, according to the FTC.

2025

Amazon reports $68 billion in digital advertising revenue.

Aug. 31, 2026

The Wall Street Journal reports the FTC is preparing to file; the commission and more than 20 states file suit, alleging Amazon reaped billions by manipulating ad prices on its retail platform. Amazon's stock tumbles.

Reactions

FTC officials say Amazon knew what merchants were bidding against each other and never disclosed that it was bidding too.

Amazon confirmed the lawsuit Monday but had not issued a detailed public response. The company has not publicly disputed the filing's basic description of the practice.

Some of the state attorneys general are expected to seek recovery of money advertisers overpaid.

What's Next

The case proceeds in federal court in Seattle.

It is the FTC's third major case against Amazon, and it lands while a separate monopolization trial against the company is still pending — leaving open whether the two run in parallel or get combined.

Open questions: how Amazon defends the soft reserve in court, which states are seeking money back, and how much they say advertisers lost.

More

Amazon's ad business is one of its most profitable lines, built on sponsored listings that sellers buy to appear at the top of search results on its own retail site. The FTC's theory is that Amazon controlled both sides of that market — running the auction while quietly bidding in it.

Reporting: Wall Street Journal, CNBC, ZeroHedge.

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