The US Federal Trade Commission (FTC) and 22 states filed a lawsuit on Monday against Amazon, accusing the e-commerce giant of manipulating online auctions for digital advertising. The complaint, filed in a federal court in Washington state, alleges that the practices resulted in more than $20 billion in overcharges for about 1.2 million advertising customers.
According to the complaint, Amazon "has secretly and systematically overcharged its approximately 1.2 million advertising customers by manipulating the 'auctions' that it uses to set the price of ads on its platform." The filing cites three advertising products at issue: Sponsored Products, Sponsored Brands, and Sponsored Display.
California Attorney General Rob Bonta, whose state is among those suing alongside the FTC, told reporters Monday that Amazon "has rigged billions of ad auctions."
Amazon's response
Amazon has rejected the allegations. In a blog post, the company called the lawsuit "misguided" and "flawed," and said regulators "cherry-picked" outdated internal documents.
Allegations in the complaint
The complaint alleges that in 2018 "Amazon began secretly manipulating its auction results to increase its ad prices" and "gave its customers no notice of this change and took affirmative steps to conceal it." It further states: "Based on numerous internal documents describing its 'hidden' 'surcharges,' Amazon's scheme has likely illegally extracted over 20 billion dollars from its unwitting advertising customers."
The allegations have not been proven in court.
Broader legal pressures on Amazon
The lawsuit is the third major FTC action against Amazon. In September 2025, Amazon agreed to pay $2.5 billion to settle allegations that it used deceptive practices to enroll consumers in Amazon Prime and made it difficult to cancel subscriptions. A trial is also scheduled for early next year in a separate case accusing Amazon of illegally maintaining a monopoly in online retail.
Financial context
Amazon generated more than $68 billion in revenue from advertising last year; its total revenue in 2025 reached nearly $717 billion. The company's stock closed down 2.5 percent on Monday. Amazon is the third largest digital advertising provider globally.