The US Federal Trade Commission and a bipartisan coalition of 22 states have sued Amazon, accusing the company of secretly rigging its advertising auction system to overcharge more than a million businesses since 2019. The complaint, filed in Washington state, alleges Amazon overrode genuine auction results with artificially inflated prices to boost its own profits, extracting roughly $20bn in the process, with the extra costs also passed on to consumers. Amazon has strongly rejected the claims, calling the lawsuit "misguided" and insisting the FTC has misunderstood how its advertising system works.

The dispute centres on Amazon's "second price" auctions, where advertisers bidding for Sponsored Product placements expect to pay just one cent more than the next-highest bid. The FTC alleges Amazon instead charged advertisers their full winning bid nearly 80% of the time, driven by dissatisfaction with auction revenue. Amazon countered that average winning bids fell 50% between 2019 and 2025 and that 92% of ads are not awarded to the highest bidder. Amazon shares fell 2.5% after the suit was announced, and the case follows the company's $2.5bn settlement last year over allegations it enrolled Prime customers without consent.