Amazon rigged billions in ad pricing, lawsuit from states and US watchdog alleges
Amazon responded to the lawsuit, arguing the US Federal Trade Commission "misunderstands" their ad market.
"Amazon overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits," says a complaint filed in the company's home state of Washington.
"Consumers are suffering, have suffered, and will continue to suffer substantial injury as a result," the complaint states, prompting swift pushback from Amazon.
"The FTC wants the public to believe this case is about higher prices for consumers. It is not," Amazon said in its statement.
The company's shares fell following the announcement of the lawsuit, closing 2.5% lower on Monday.
Many brands and sellers compete on Amazon to place Sponsored Product ads and Sponsored Brands ads when consumer search for products using keywords on Amazon's e-commerce platform.
Those placements are then auctioned off to the highest bidder.
"Average winning bids fell 50% from 2019 to 2025 on Sponsored Products search ads, and roughly 92% of placed ads are not given to the highest bid," the company added.
Amazon settled the case for $2.5bn, including civil penalties and consumer refunds.
Amazon agrees to pay $2.5bn over claims it tricked Prime customers
