FTC Sues Amazon Over Alleged $20 Billion Advertising Surcharge Scheme via @sejournal, @brookeosmundson

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Published: 2026-08-31T23:55:50.687Z • Permanent link

Federal Trade Commission (FTC) officials have announced a lawsuit against Amazon, alleging that the e-commerce giant has overcharged advertisers by more than $20 billion through changes to its ad auctions. The FTC claims that Amazon's new system, which was introduced in 2019, prioritizes its own advertising products, such as Amazon Prime Video and Amazon Music, over those of third-party sellers. This prioritization allegedly led to higher prices for advertisers, resulting in billions of dollars in additional costs.

Amazon's advertising platform, known as Amazon Marketing Services (AMS), was launched in 2015 as a way for third-party sellers to promote their products on Amazon's vast marketplace. However, in 2019, Amazon introduced a new system that allowed the company to prioritize its own advertising products. This move was seen as a way for Amazon to increase its own revenue from advertising, but it also had the effect of driving up prices for third-party advertisers.

According to FTC officials, Amazon's changes to its ad auctions were not transparent and did not provide adequate notice to advertisers about the changes. The agency claims that Amazon's actions are in violation of federal antitrust laws, which prohibit companies from engaging in practices that stifle competition and drive up prices. The lawsuit has been filed in federal court in Washington, D.C., and is expected to be closely watched by the advertising and e-commerce industries.

The FTC's lawsuit against Amazon over its advertising practices has significant implications for the global advertising industry. Advertisers rely on Amazon's ad auctions to reach their target audiences, and the changes made by Amazon have had a major impact on the market. Many third-party advertisers have expressed frustration with the new system, which they say has driven up prices and reduced their ability to compete with Amazon's own advertising products.

The lawsuit also has implications for the broader advertising industry, which is heavily reliant on Amazon's ad auctions. Advertisers are already paying higher prices for ad space, and the changes made by Amazon have reduced the competitiveness of third-party sellers. Research communities have also been affected, as the changes have reduced the availability of data on Amazon's ad auctions, making it more difficult for researchers to study the impact of advertising on consumer behavior.

The FTC's actions are also likely to have a significant impact on the regulatory environment for advertising. The agency's lawsuit is seen as a challenge to Amazon's dominance in the advertising market, and it may set a precedent for other companies to follow. The lawsuit is also likely to lead to increased scrutiny of Amazon's advertising practices, which could result in further changes to the company's ad auctions.