FTC Accuses Amazon of Raising Ad Costs Through Hidden Reserve Prices
The FTC and attorneys general from 22 states accuse Amazon of concealing reserve prices in search-ad auctions and increasing advertisers’ costs. Amazon denies the allegations.
What are the key facts?
- 1FTC and attorneys general from 22 states filed suit
- 2Alleged practice continued for seven years
- 3Amazon denies the allegations
What happened?
The U.S. Federal Trade Commission and the attorneys general of 22 states have jointly sued Amazon, accusing the company of using a reserve-price mechanism in search-ad auctions that was not fully disclosed to advertisers. The lawsuit alleges that the practice continued for seven years and increased the fees paid by some advertisers by adjusting the second-price auction model. According to the plaintiffs, advertisers lost billions of dollars as a result, and the related costs may also have been passed on to consumers through product prices.
Amazon denies the main allegations in the lawsuit. The company says its ad-auction system can maintain relatively stable cost-per-click rates while helping advertisers achieve higher conversion efficiency and return on investment. The case currently concerns the platform’s ad-auction rules, pricing disclosures, and advertisers’ actual spending.
What does this mean for cross-border sellers?
The lawsuit puts Amazon’s ad-auction transparency and fee structure under regulatory scrutiny. Sellers should monitor actual click costs and conversion changes, not just backend bids. A common mistake is attributing all ad-cost fluctuations to competitors while overlooking changes to platform rules or auction mechanisms. Highest-priority action: Save click-cost, conversion-rate, and order data by campaign this week to establish a comparison baseline.