Amazon Faces $20 Billion Ad Price Overcharge Allegations

The U.S. Federal Trade Commission and a coalition of 22 states filed a lawsuit Monday against Amazon, accusing the company of rigging its online ad auctions and inflating prices to the tune of $20 billion since 2019.

According to the complaint, Amazon secretly overcharged advertisers by overriding the second‑price auction mechanism, set higher prices, and thus boosted its own profits. The litigation asserts that consumers are ultimately harmed as the extra charges are passed on in product prices.

Amazon responded by strongly disagreeing with the allegations, calling the suit misguided and stating it misinterprets how advertisers bid and operate. The company highlighted that its average winning bids fell 50% from 2019 to 2025 and explained that most ads are not awarded to the highest bid.

Following the lawsuit filing, Amazon shares fell 2.5% on the market. The case echoes a 2025 settlement where Amazon paid $2.5 billion for misleading Prime customers.