FTC and 22 states sue Amazon over a hidden ad-auction surcharge run since 2019
The FTC alleges Amazon added a secret "soft reserve price" in 2019, plus an internally documented "invented auction participant" — a fake bidder — so Sponsored Products advertisers paid their own full bid about 80% of the time instead of the promised one cent over the runner-up. That converts a second-price auction into a first-price one across more than a million brands and sellers, and puts the pricing mechanics behind Amazon's $68B ad business in front of a court; Amazon calls the suit misguided.
Source: techcrunch.com ↗
Amazon charged Sponsored Products advertisers their own full winning bid close to 80% of the time — effectively turning what was marketed as a second-price auction into a first-price one.
FTC complaint
Why this matters
- → Amazon allegedly rigged ad auctions to charge 80% full price instead of promised second-price mechanics
- → Affects $68B ad business and over one million advertisers; could reshape how ad platforms price
The hidden auction rigging