FTC and 22 States Sue Amazon Over Secret Ad Surcharges

The FTC sued Amazon Monday, alleging the company manipulated ad auction prices and misled advertisers about its pricing systems for seven years.

• 20+ state attorneys general, from both parties, joined the lawsuit.
• Amazon earned $68 billion in digital advertising revenue in 2025.
• Amazon's alleged scheme began in 2018 and raised minimum ad prices 70%-80% of the time.
• This is the FTC's third major case against Amazon; a monopolization trial is also pending.

Why it matters: The FTC alleges Amazon used a hidden mechanism — an internal bid called a 'soft reserve' — to inflate what merchants paid for sponsored ads without their knowledge.

• Amazon knew merchants' competing bids and did not disclose its own bidding practice, FTC officials said.
• Some state attorneys general may seek to recover money advertisers overpaid.

How 33 sources split on this story

Where they split: Coverage does not split on facts; the core allegations come from FTC officials and Amazon has not publicly disputed the filing's basic description.

What’s next: The case will proceed in Seattle federal court.

• Amazon confirmed the lawsuit Monday but had not issued a detailed public response.
• How will Amazon defend the 'soft reserve' bidding practice in court?
• Which states are seeking financial recovery, and how much do they claim advertisers lost?
• Will this case be combined with or run parallel to the pending monopolization trial?