09/12/2026
On August 31, the Federal Trade Commission and 22 state attorneys general sued Amazon over the price of advertising on its own store.
The allegation is that Amazon said one thing and charged another. For years Amazon told advertisers it ran a second-price auction: win the placement, pay one cent more than the next-highest bidder. According to the complaint, Amazon added an undisclosed charge of its own in 2019, called it a "soft reserve price" internally, and let advertisers go on bidding as though the old rule still held. One internal Amazon document called it an "invented auction participant."
Amazon sells the placement, runs the auction, and reports the result. No independent record exists for a seller to check. The obligation to price that auction as described sat with Amazon, and the FTC alleges the company spent seven years manipulating it instead.
To bolster its claims, the FTC asserts that Sponsored Products advertisers paid their own full bid between just 30% and 40% of the time in 2021, 70% of the time in 2022, and roughly 80% of the time by 2024.
More than a million advertisers paid those invoices, over 500,000 of them small and mid-size businesses. None of them could have found this alone. That is the uncomfortable question for any brand concentrated on one channel: how much of your cost base runs on numbers only your marketplace can see?
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