FTC, 22 US States Sue Amazon Over Alleged $20 Bn Ad Auction Manipulation

The US Federal Trade Commission (FTC) and 22 states have sued Amazon, alleging that the e-commerce giant manipulated online auctions used to set prices for digital advertisements. The lawsuit claims the alleged practices resulted in more than $20 billion in overcharges for about 1.2 million advertising customers, according to an AFP report.

The complaint, filed in a federal court in Washington state, alleges that Amazon secretly manipulated its advertising auctions to increase the prices paid by customers.

Amazon has rejected the allegations, calling the lawsuit “misguided” and “flawed”. The company also accused regulators of relying on “cherry-picked” outdated internal documents, the news agency reported. The case covers three Amazon advertising products — Sponsored Products, Sponsored Brands and Sponsored Display.

What The FTC, States Allege

According to the complaint, Amazon began manipulating its auction results in 2018 to increase ad prices. The filing alleges that customers were not informed about the change and that Amazon took steps to conceal the practice.

The complaint also refers to alleged hidden surcharges and estimates that Amazon may have extracted more than $20 billion from advertising customers through the scheme. The allegations have not been proven in court.

California Attorney General Rob Bonta, whose state is among those suing Amazon, accused the company of rigging billions of dollars worth of advertising auctions.

Amazon’s advertising business generated more than $68 billion in revenue last year. Its total revenue in 2025 was nearly $717 billion, according to the report.

Amazon Faces More US Antitrust Pressure

The latest case is the third major lawsuit filed against Amazon by the FTC. In September 2025, Amazon agreed to pay $2.5 billion to settle allegations that it used deceptive practices to enrol consumers in Amazon Prime and made it difficult for them to cancel their subscriptions.

Amazon is also facing an antitrust case over allegations that it illegally maintained a monopoly in online retail. A trial in that case is scheduled for early next year.

The Amazon case comes amid wider US regulatory scrutiny of major technology companies. The Justice Department has sued Google over its digital advertising and online search businesses and also sued Apple in 2024 over allegations that it made it difficult for consumers to switch to competing devices.

Apple and the Justice Department are discussing a potential settlement in that case, according to a July report by Bloomberg.

The FTC also sued Meta in 2020 over its acquisition of WhatsApp, alleging that the deal helped the company maintain an illegal monopoly in personal social networking. A federal judge dismissed the case in November 2025, while the FTC later said it would appeal the decision.

Texas Attorney General Ken Paxton has separately announced a lawsuit accusing Amazon of “rigging” its advertising auctions. The latest actions against Amazon have bipartisan backing, with California and Texas among the states taking action.