FTC, 22 states sue Amazon over deceptive advertising practices
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The Federal Trade Commission, alongside a bipartisan group of nearly two dozen state attorneys general, sued Amazon on Monday in federal court.
Why it matters: It's the first major federal lawsuit against Amazon that focuses specifically on its ad business.
What they're saying: In a statement, Amazon called the lawsuit "misguided" and said it "strongly disagrees" with its claims.
The big picture: The lawsuit, filed in the Western District of Washington, alleges Amazon overcharged more than 1.2 million advertisers by adding secret surcharges and inflating rates during its ad auctions.
- The suit says those practices generated over $20 billion in revenue for Amazon.
- The plaintiffs argue Amazon overrode and replaced the prices set by its auction with higher rates to earn more revenue, unbeknownst to advertisers bidding for placements across three of its ad products: Sponsored Products, Sponsored Brands and Sponsored Display.
- The complaint alleges, according to internal documents, that Amazon began overriding its auction with higher rates in 2018, six years after it first launched its ad auction.
Between the lines: The FTC and the 22 attorneys general are asking the court for an injunction to force Amazon to stop its alleged deceptive practices, and to order Amazon to pay monetary relief for the harm caused, although the suit did not suggest how much that might be.
- It has also asked the court to impose civil penalties where authorized, and grant "other appropriate relief."
Zoom out: The lawsuit targets what's quickly become one of the tech giant's fastest-growing businesses, which earned $68.6 billion in 2025.
- Federal regulators have sued Amazon before over antitrust issues in its e-commerce business and its Prime enrollment practices, but this is the first time they've targeted Amazon for practices related to its ads unit.
- Other tech firms, most notably Google, have faced much more public scrutiny over their ads practices. The Justice Department won an antitrust case against Google last year for illegally monopolizing parts of its digital ad tech.
Editor's note: This story has been updated with comment from Amazon.
