Amazon accused of $20bn ad overcharges in US lawsuit

The US Federal Trade Commission and 22 states sued Amazon on Monday, accusing the company of manipulating online ad auctions and overcharging about 1.2 million advertising customers by more than $20 billion.

The complaint, filed in federal court in Washington state, says Amazon secretly changed the auctions it uses to set prices for ads on its platform. It cites three advertising products: Sponsored Products, Sponsored Brands and Sponsored Display.

The filing alleges that Amazon began manipulating auction results in 2018 to raise ad prices, did not tell customers and took steps to hide the change.

Amazon rejected the lawsuit in a blog post, calling it “misguided” and “flawed.” The company said regulators had “cherry-picked” outdated internal documents.

California Attorney General Rob Bonta, whose state is among those suing with the FTC, told reporters that Amazon had “rigged billions of ad auctions.” Texas Attorney General Ken Paxton, a Republican, also announced a similar but separate case against Amazon over its advertising auctions.

Amazon generated more than $68 billion in advertising revenue last year, and its total revenue in 2025 reached nearly $717 billion. Its stock closed down 2.5 percent Monday.

The company is the third-largest digital advertising provider globally, according to the supplied figures. Analytics firm eMarketer said Google is expected to fall to second place as Meta overtakes it by the end of the year.

The case is the third major FTC lawsuit against Amazon. In September 2025, Amazon agreed to pay $2.5 billion to settle allegations that it used deceptive practices to enroll consumers in Amazon Prime and made subscriptions hard to cancel. A separate trial is scheduled to begin early next year in a case accusing Amazon of illegally maintaining an online retail monopoly.