The U.S. Federal Trade Commission has filed a new lawsuit against Amazon, joined by 22 states, over claims that the company quietly changed how advertising prices were set on its platform.
According to the complaint, the alleged practice affected more than one million brands and sellers and may have increased Amazon's ad revenue by tens of billions of dollars over several years. The case focuses on Sponsored Products, Sponsored Brands, and Display ads that appear alongside search results.
The FTC says Amazon had promoted its system as a second-price auction, where the winner would pay only slightly more than the next-highest bid. That structure, the agency argues, encouraged advertisers to bid confidently while expecting controlled costs.
But the lawsuit claims that beginning in 2019, Amazon introduced a hidden surcharge it internally referred to as a soft reserve price. The complaint also says the company used an internal mechanism described as an "invented auction participant" to push prices higher than normal competition would produce.
Amazon generated more than $68 billion in advertising revenue last year, underscoring the scale of its ad business. In response, the company said the lawsuit misunderstands how its advertising auctions work and stated that advertisers are properly informed about pricing.
The case adds fresh attention to the fast-evolving digital advertising market, where transparency, automation, and auction design continue to shape how brands reach consumers. The outcome could influence future standards for online ad pricing and platform accountability.
