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3 clusters · 135 sources · 28 days · First seen about 2 months ago · Last updated 29 days ago

FTC and states lawsuit against Amazon advertising

Overview

The US Federal Trade Commission (FTC) and 22 state attorneys general have filed a lawsuit against Amazon in a Seattle federal court, alleging the company manipulated online advertising auctions to inflate costs. The complaint claims that since approximately 2019, Amazon transitioned from standard second-price auctions to a system utilizing an undisclosed “soft reserve price.” This mechanism reportedly acts as a phantom bidder, forcing advertisers to pay their full bids more frequently.

Regulators allege this practice has affected roughly 1.2 million advertisers, including 500,000 small and medium-sized businesses, potentially generating over $20 billion in additional revenue for Amazon. The FTC notes that the frequency of these occurrences rose from approximately 4% in late 2020 to between 79% and 80% in 2024. The lawsuit asserts these costs are often passed to consumers through higher product prices.

Amazon has denied the allegations, describing the lawsuit as “misguided.” The company maintains its auction system is transparent and disputes the FTC's claims, stating its methods actually saved advertisers over $8 billion between 2021 and 2025.

Despite the litigation, Amazon has seen continued growth in other sectors. Advertising revenue grew 26% year-over-year in the second quarter to approximately $19.8 billion, while Amazon Web Services (AWS) revenue rose 37% year-over-year to $42.2 billion. Institutional investors currently hold 72.2% of Amazon’s stock, with firms such as Okabena Investment Services Inc. increasing their stakes during the second quarter.

Entities

Federal Trade Commission · Amazon · Andrew Ferguson · Alphabet · Jeff Jackson

Claims

What the coverage asserts, and how many sources carry each claim.

Coverage disagrees

Sources make claims that cannot both be true. CLSTR reports the disagreement; it does not decide who is right.

"Amazon shares fell over 3%, resulting in an approximately $86 billion loss in market value."

vs

"Amazon shares fell between 2.5% and 3% following the news of the lawsuit."

The claims provide different ranges for the drop in Amazon's share price (between 2.5% and 3% versus over 3%).

[DISPUTED] Amazon shares fell between 2.5% and 3% following the news of the lawsuit.
[DISPUTED] Amazon shares fell over 3%, resulting in an approximately $86 billion loss in market value.
[● 44 SOURCES] The FTC and a bipartisan group of 22 state attorneys general filed a lawsuit against Amazon alleging the company deceived advertisers by secretly raising minimum ad prices.
[● 33 SOURCES] The alleged practice affected approximately 1.2 million advertisers, including over 500,000 small and medium-sized businesses.
[● 32 SOURCES] The lawsuit alleges Amazon illegally obtained over $20 billion from advertisers through these practices.
[● 27 SOURCES] Amazon allegedly began using a 'soft reserve' mechanism in 2018 to secretly raise minimum advertising prices.
[● 26 SOURCES] Amazon allegedly manipulated advertising prices for seven years using 'soft reserve' bids to increase minimum costs.
[● 23 SOURCES] The alleged price manipulation earned Amazon tens of billions of dollars over a seven-year period.
[● 18 SOURCES] Amazon denied the accusations, stating that advertisers adjust their bids based on real-world performance rather than auction mechanics.
[● 14 SOURCES] Amazon previously paid a $2.5 billion fine regarding Amazon Prime subscription practices.
[● 13 SOURCES] Amazon's digital advertising platform earned approximately $68 billion in revenue in 2025.
[● 3 SOURCES] The FTC plans to file a lawsuit against Amazon alleging the company manipulated advertising prices.

Timeline

29 days ago

[BUSINESS] 2 sources
Amazon faces FTC lawsuit amid AWS growth and investor activity
Amazon faces an FTC lawsuit regarding its advertising auction practices while seeing strong growth in AWS revenue and continued interest from institutional investors.
about 2 months ago

[BUSINESS] 4 sources
Amazon sued by FTC for allegedly manipulating ad auctions
The FTC and 22 state attorneys general are suing Amazon, alleging the company manipulated ad auctions to generate $20 billion in extra revenue since 2019, leading to higher costs for sellers and consumers.
about 2 months ago

[BUSINESS] 130 sources
Amazon sued by FTC and 22 states over alleged ad auction manipulation
The FTC and 22 states are suing Amazon, alleging the company manipulated ad auctions to secretly overcharge advertisers, potentially netting over $20 billion since 2019.

Sources

abc17news.com · aboutamazon.com · ad-hoc-news.de · agcensus.usda.gov · allgaeuer-zeitung.de · americanbazaaronline.com · apple.slashdot.org · ariadna.elmundo.es · bild.de · bitcoinethereumnews.com · biznes.interia.pl · biznisvesti.mk · blogspan.net · brandaktuell.at · brasilemfolhas.com.br · china.timesofnews.com · cnn.gr · contilnetnoticias.com.br · cordcuttersnews.com · correiomanha.pt · cryptobriefing.com · dailyguardian.ca · diarioviseu.pt · digitalnewsreport.com · dominicanaaldia.com · dorstenerzeitung.de · economiematin.fr · elcorreoweb.es · eldia.com.do · epochtimes.com · etailment.de · europesays.com · expansion.com · extradienst.at · fehmarn24.de · finanzen.ch · finbold.com · fingerlakes1.com · fox13seattle.com · freerepublic.com · fxcc.com · giga.de · gigazine.net · gizmodo.com · hna.de · independent.co.uk · infomoney.com.br · insurancejournal.com

This summary has been updated 3 times: see revision history