Economy

Amazon ad auction case reveals alleged hidden charges

The Amazon ad auction lawsuit reveals alleged hidden price increases. FTC filings detail the charges, while Amazon disputes deception.

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The US Federal Trade Commission (FTC) has set out new details in its Amazon ad auction lawsuit with 22 states. The updated complaint, filed in federal court in Washington state on October 28, 2026, says Amazon hid price rises from ad buyers.

However, Amazon denies misleading ad buyers. It says its prices reflect what ad space is worth and how well ads match shoppers. The charges remain in dispute. The court has not ruled that Amazon broke the law.

What the Amazon ad auction complaint alleges

The complaint says Amazon first works out an auction price. Then it sets a higher charge through what it calls a soft reserve. The table shows the largest price rises alleged in the case, not the average across all ads.

Price increases alleged in the Amazon ad complaint
Shopping period Alleged maximum increase above auction price
Ordinary days 50%
Prime Day or Black Friday 250%

Source: FTC and state plaintiffs, complaint paragraph 50

Data as of: 2026-10-28

The complaint alleges larger maximum surcharges on peak shopping days; these are not average increases or court findings.

The filing also cites an internal memo on the December 2022 holiday period. It says higher charges brought in more than $87 million worldwide. The FTC and states say Amazon raised fees in small steps to avoid price jumps that would upset ad buyers.

The FTC also says ad buyers asked whether the auction process had changed. In response, the FTC says, Amazon blamed more bids from rivals instead of revealing the extra fees.

Why the auction rules matter

GeekWire reported that the lawsuit began on August 31, 2026, in the US District Court for the Western District of Washington. It also reported claims that Amazon overcharged about 1.2 million ad buyers.

The complaint describes a second-price auction as one where a winner pays just enough to beat the next-ranked ad. Because ad buyers rely on those rules, the FTC and states say, they shape how much buyers bid. The Amazon ad auction case rests on claims that buyers did not know how prices changed.

Amazon disputes the allegations

In its response to the suit, Amazon says ad buyers set a top bid and change it based on results. It also says reserve prices are common in the ad market. Its system ranks ads by how well they match shoppers, not just bid size.

Amazon says a hard reserve is the bid needed to enter an auction. By contrast, it says, a soft reserve reflects what the ad space is worth. Under its rules, a winner may pay the soft reserve or its own bid. The price depends on which of these levels it meets.

The company says some old training guides gave a simpler account of its system. It says it changed or removed them. It also says teams now check that their advice on auctions is clear and up to date.

The FTC and states seek a court order to stop the conduct, payments and state-law fines, according to the complaint. The court must decide those requests; ad buyers have not won those payments.

Sources: FTC complaint, FTC statement, Amazon, GeekWire