FTC and 22 States Sue Amazon Over Alleged Hidden Surcharge in Ad Auctions

The Federal Trade Commission together with 22 states, among them Florida, have sued Amazon in federal court, alleging the e-commerce giant secretly added a surcharge to its sponsored-product ad auctions. According to the complaint, Amazon created a fictitious bidder in most auctions, causing advertisers to be charged their full winning bid rather than the advertised “one-cent-over” rule. Florida Attorney General James Uthmeier said the scheme raised prices on groceries, medicine and other essentials for residents.

The lawsuit names all participating states and claims the practice occurred about 80 % of the time. Amazon responded that the FTC’s allegations lack evidence, pointing to flat cost-per-click figures and claiming advertisers saved billions through its relevance-based system. The company also said winning bids have fallen and most ads are not awarded to the highest bidder, rejecting the notion of a systematic overcharge.