U.S. FTC Accuses Amazon of Secretly Tripling Ad Prices
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The FTC, joined by 22 states, updated its lawsuit against Amazon, alleging the company secretly inflated search-ad prices by up to three times and misled advertisers by blaming market competition — putting Amazon's ad business under direct regulatory pricing risk.
What exactly is Amazon accused of?
The FTC says Amazon secretly raised prices in its ad-auction system — the mechanism where advertisers bid for search-result placement — by up to 50% on ordinary trading days.
During Prime Day and Black Friday, markups exceeded three times the normal rate. In the 2021 holiday season, average cost-per-click rose 20%, with some advertisers paying triple their usual rate.
This means → advertisers thought they were bidding in a fair auction, while the platform was quietly layering on a hidden surcharge underneath.
How did Amazon explain the price hikes?
When advertisers asked why costs were climbing, Amazon blamed "increased market competition" rather than its own internal pricing adjustments.
The FTC calls this misleading — the real driver was the platform's deliberate repricing, not a shift in supply and demand.
In plain terms = the platform turned the tap itself, then told advertisers it was a drought.
Why did executives add a hidden surcharge?
The complaint says Amazon executives imposed an additional hidden surcharge the following year to hit revenue targets, generating an extra $87 million in global revenue.
This means → the repricing was not a one-off event — it was used repeatedly as a routine revenue-management lever.
The FTC stressed that advertisers large and small were affected, not just major brands.
How does Amazon push back?
Amazon says the FTC "fundamentally misunderstands how advertisers operate." Advertisers adjust bids based on actual campaign performance, not on descriptions of the auction mechanism.
Amazon cites three data points: average winning bids for sponsored-product search ads fell 50% from 2019 to 2025; roughly 92% of ad impressions did not go to the highest bidder; advertisers never pay more than their bid cap.
In plain terms = Amazon's argument is: regardless of how the auction engine is tuned, your spending cap holds — and the overall price trend is down.
What comes next in this case?
The lawsuit was originally filed in August 2024 in the U.S. District Court for the Western District of Washington. This update adds newly declassified allegations.
This reflects a regulatory escalation around ad-pricing transparency on major platforms — moving from "is there monopoly power?" to "is the pricing process itself deceptive?"
This means → the eventual ruling will directly shape how much pricing freedom Amazon's ad business retains, and may set a precedent for ad operations across other platforms.
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