FTC and 22 states sue Amazon over alleged hidden ad surcharges

The Federal Trade Commission, together with attorneys general from 22 states, has sued Amazon, alleging the e-commerce giant concealed extra charges in its advertising auctions for over six years. The complaint asserts that hidden reserve prices forced advertisers to overpay for product ads and that internal documents reveal company staff recognized the revenue boost but warned of long-term risks. The FTC estimates the scheme may have extracted more than $20 billion from advertisers and claims the overcharges ultimately raised prices for shoppers.

Amazon has responded with a detailed statement denying the allegations, saying the lawsuit relies on a few simplified communications and provides no proof of higher consumer costs. The company calls the action misguided and asserts it fundamentally misunderstands how its ad auctions operate.