FTC and 22 states sue Amazon over alleged $20bn advertising surcharges

The US Federal Trade Commission and a bipartisan group of 22 states sued Amazon on Monday, August 31, 2026, alleging that the company manipulated advertising auctions and collected more than $20 billion through undisclosed surcharges.

The complaint says Amazon used its second-price advertising auctions to raise the amount paid by winning bidders, including through higher bids allegedly inserted by the company. Regulators contend that about 1.2 million advertisers were overcharged from 2019, including more than 500,000 small and medium-sized businesses.

FTC Chair Andrew Ferguson said the added advertising costs were often passed on to consumers. The agency estimates that Amazon's advertising operation generates more than $68 billion in revenue and ranks behind only Google and Meta among online advertising marketplaces.

Amazon denies the allegations. In a company response cited by The Guardian, it called the case misguided and said the FTC had drawn an inaccurate conclusion from a limited number of internal communications reviewed among roughly 1.5 million pages of material. Amazon also said it continues to offer customers low prices across a wide selection of products.

The FTC and participating states are asking the court to stop the challenged practices, impose civil penalties and require refunds for affected advertisers. The claims have not been proven in court.