Amazon accused of rigging over $20bn in ad auctions

U.S. regulators and 22 states have filed a lawsuit against Amazon, alleging the company secretly overcharged advertisers and lifted ad prices through manipulated second‑price auctions.

According to the complaint, Amazon’s scheme has generated an estimated $20 billion (about £14.8 billion) in excess revenue since 2019. The company allegedly overrides genuine auction outcomes and replaces them with higher prices that it sets internally, a practice that should not have occurred under the advertised second‑price auction model.

Amazon has strongly denied the allegations in a statement to the BBC, calling the lawsuit “misguided” and challenging the premise that it misled advertisers. The firm claims the FTC misunderstand how advertising bids operate and highlights that the majority of sponsored ads are not awarded on the highest bid.

The lawsuit also argues that the hidden charge on advertisers is ultimately passed onto consumers, inflating prices for shoppers. The FTC and its partner states say this “substantial injury” extends beyond advertisers to the wider public.

Amazon’s shares fell 2.5 % after the filing, reflecting market reaction to the allegations. The company’s share price recovery will depend on the outcome of this litigation.

This legal action follows a $2.5 billion settlement with the FTC last year over Prime subscription practices, underscoring continued scrutiny of Amazon’s business model.

Source: BBC News, 31 August 2026