FTC and 22 states sue Amazon over alleged secret ad surcharge scheme

Updated on: August 31, 2026 / 4:00 PM EDT / CBS News

FTC and 22 states sue Amazon over alleged secret ad surcharge scheme

TL;DR

  • The FTC and 22 states are suing Amazon for allegedly inflating prices in its online advertising auctions.
  • The lawsuit claims this practice, in place for seven years, surcharged over one million brands and sellers.
  • Amazon allegedly charged winners their own bid price about 80% of the time, deviating from the 'second-price auction' standard.
  • FTC Chairman Andrew Ferguson stated that these higher costs were largely passed on to American consumers.
  • Amazon calls the lawsuit "misguided" and claims advertisers do not bid based on auction descriptions.
  • Internal documents suggest Amazon knew advertisers believed they were in a true second-price auction.
  • The lawsuit seeks to bar Amazon from the alleged scheme and require penalties and damages.