FTC lawsuit over Amazon advertising practices
The U.S. Federal Trade Commission announced it will file a lawsuit in a Seattle federal court accusing Amazon.com Inc of manipulating the prices businesses pay to advertise on its retail platform over a seven‑year period. More than twenty state attorneys general, including those from New York, California and Florida, are expected to join the case.
Following the Wall Street Journal report, Amazon’s shares fell 2.8% on Monday, 31 August 2026. The company, which operates the world’s third‑largest digital advertising platform behind Alphabet’s Google and Meta Platforms, reported $68 billion in advertising revenue for 2025 in its securities filings.
The FTC’s complaint alleges that beginning in 2018 Amazon altered its auction strategy by inserting its own bid—referred to as a “soft reserve”—that was higher than the runner‑up bidder’s price. This practice allegedly raised the minimum price advertisers had to pay. Internal ad executives reportedly tracked the resulting “surcharge” and attempted to limit disclosure of the practice. Initially the tactic was applied only on high‑traffic shopping days, but in recent years Amazon intervened in auctions to raise the minimum price 70 % to 80 % of the time, which the FTC says increased pay‑per‑click costs by 50 % on major shopping days.
Amazon’s public advertising webpage, last updated in April, states that it uses “reserve pricing” that “may affect the cost of your ad.”
This lawsuit represents the FTC’s third major action against Amazon. The company previously agreed to pay $2.5 billion in 2025 to settle a separate case alleging it misled consumers into signing up for its Prime service and made cancellation difficult. Additionally, Amazon faces a separate monopolization lawsuit that is scheduled for trial next year.