US FTC Sues Amazon with 22 States Over Ad Pricing Fraud

The US Federal Trade Commission (FTC) filed a lawsuit against Amazon on August 31, accusing the e-commerce giant of deceiving advertisers by manipulating ad prices and generating tens of billions of dollars in revenue over a seven-year period. The lawsuit, jointly brought by attorneys general from 22 states, was filed in the US District Court for the Western District of Washington. This marks the FTC's third major case against Amazon, following a $2.5 billion settlement in 2025 over a Prime subscription lawsuit and a separate antitrust case scheduled for trial in 2027.

In the complaint, the FTC alleged that Amazon changed its ad auction strategy starting in 2018, secretly raising the minimum prices advertisers were required to pay. Through a mechanism called "soft floor pricing," Amazon entered bids higher than the second-highest bidder in auctions without disclosing this practice to advertisers.

Amazon operates the world's third-largest digital advertising platform, with ad revenue reaching $68 billion in 2025. In response to the allegations, Amazon said its pricing practices do not harm consumer interests and that the claims are contrary to the facts. The company noted that the complaint cites no evidence of consumer price increases and argued that the FTC fundamentally misunderstands how advertisers operate. Following the announcement, Amazon's share price fell sharply.