Amazon's own auction, Amazon's own price: the $20bn the FTC says you paid without knowing
An advertiser bids for a spot on Amazon's search page. The auction says one price. Amazon, the FTC alleges, quietly charged another — and the difference ended up on the product tag you saw.
On Monday the US Federal Trade Commission and a bipartisan group of 22 states sued Amazon over how it sets the price of ads on its own shopping site. The claim is simple and uncomfortable: Amazon secretly overcharged more than a million advertising customers by manipulating the online auctions that decide those prices. Since 2019, the lawsuit says, the alleged scheme has likely netted the company $20bn.
Here is the mechanic, in plain words. When brands compete to show up when you search "running shoes", the slot goes to the highest bidder — but in a so-called "second price" auction the winner expects to pay only one cent more than the person behind them. Like an eBay bidding war where you don't pay your maximum, just enough to beat the next guy. The complaint, filed in Amazon's home state of Washington, alleges that in practice Amazon charged Sponsored Products advertisers their own full winning bid close to 80% of the time. "Amazon overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits," the complaint says. The reason, according to the lawsuit: the company "was unhappy about how much revenue its advertising auctions were generating".
Advertising costs are not a private matter between Amazon and a shoe brand. The FTC and the states say the extra costs were passed on to shoppers: "Consumers are suffering, have suffered, and will continue to suffer substantial injury as a result," the complaint states. If that holds up, this is a case about a hidden surcharge sitting inside ordinary prices for eight years.
A penny more than the next bidder, or the whole bid? Between those two words sits $20bn.
Amazon rejects the framing hard. It "strongly disagrees" that it misled advertisers, calls the suit "misguided", and says the FTC "fundamentally misunderstands how advertisers operate". Its argument is that the mechanics on paper don't matter because bidders react to results: "Advertisers adjust bids based on real-world performance, not descriptions of auction mechanics." It also offers two numbers of its own — average winning bids fell 50% from 2019 to 2025 on Sponsored Products search ads, and roughly 92% of placed ads are not given to the highest bid. Note what that defence does and does not answer. It says the prices came down and the top bidder doesn't always win. It does not say the auction charged what advertisers were told it would charge.
And there is history here. Last year Amazon settled an FTC case alleging it signed millions of people up to Prime without their consent and made cancelling hard — $2.5bn, including civil penalties and consumer refunds. Same pattern of accusation, different product: the customer agreed to one thing, the system did another.
Anyone who buys anything on Amazon, because the complaint's whole theory is that the surcharge travelled down to the price tag. And, very directly, the small end of the internet economy: the million-plus advertising customers include people running a two-person brand off a laptop, students and twenty-somethings selling prints, phone cases or supplements, paying Amazon ad money out of the same account that covers rent. If you have ever put $200 into Sponsored Products hoping to make $400, the lawsuit says you may have been paying your own ceiling every time instead of one cent above the next bidder. Also worth a thought for anyone building a career in ad tech or performance marketing — the industry's basic promise is that the auction is neutral.
The case was filed on Monday and Amazon is fighting it, so watch for the company's formal response in the Washington court and for whether any of the 22 states break from the group. The number to keep an eye on is that 80% figure — whether Amazon disputes it directly or keeps answering with the 50% drop in average winning bids. Amazon's shares closed 2.5% lower on Monday. No trial date or hearing date has been named.
Amazon's defence is that ads got cheaper — bids fell 50% between 2019 and 2025. Both things can be true: the price falls, and the rules still don't match the description. An auction only works if everyone believes the counting is honest. That is the part $20bn will be spent arguing about.
Sources: BBC News (Lily Jamali), 31 August 2026 — reporting on the FTC and 22-state lawsuit against Amazon; Amazon statement to the BBC.
FTC и 22 штата утверждают, что Amazon восемь лет тайно завышал цены на своих рекламных аукционах и снял с миллиона рекламодателей лишние $20 млрд — а счёт в итоге оплатил покупатель на ценнике товара.
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