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The United States Federal Trade Commission(FTC) and 22 states have sued Amazon, accusing the e-commerce giant of manipulating its digital advertising auctions and allegedly overcharging about 1.2 million advertising customers by more than $20 billion.
The lawsuit, filed on Monday in court in Washington state, alleges that Amazon secretly altered the way it conducted ad auctions, allowing it to increase the prices paid by advertisers on its platform.
The complaint focuses on three advertising products: Sponsored Products, Sponsored Brands and Sponsored Display.
According to the regulators, Amazon began manipulating auction results in 2018 without notifying customers and took steps to conceal the changes.
The lawsuit claims the alleged scheme involved hidden surcharges that enabled Amazon to extract more than $20 billion from advertisers without their knowledge.
“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 complaint says.
California Attorney General Rob Bonta accused Amazon of rigging billions of dollars worth of advertising auctions, describing the case as a bipartisan effort involving the state and federal regulators.
Amazon has rejected the allegations.
In a blog post, Amazon called the lawsuit “misguided” and “flawed,” and said that regulators “cherry-picked” outdated internal documents.
The lawsuit marks the third major legal action brought against Amazon by the FTC.
In September 2025, Amazon agreed to pay $2.5 billion to settle allegations that it used deceptive methods to enrol consumers in Amazon Prime and made it difficult for them to cancel their subscriptions.
The company is also facing a separate antitrust case accusing it of illegally maintaining a monopoly in online retail, with a trial scheduled to begin early next year.
