FTC and 22 States Sue Amazon Over Alleged Hidden Surcharges
U.S. regulators and 22 states accuse Amazon of imposing hidden surcharges in advertising auctions, potentially affecting sellers’ on-platform advertising costs.
What are the key facts?
- 1Federal Trade Commission and 22 states
- 2More than $20 billion in hidden surcharges
- 3Involves 1.2 million advertisers and 500,000 small and midsize sellers
- 4Second-price auction mechanism
What happened?
The U.S. Federal Trade Commission and 22 states filed a lawsuit against Amazon on August 31, 2026, alleging that the company collected more than $20 billion in hidden surcharges from advertisers over several years through a non-public advertising auction mechanism. The lawsuit concerns Amazon’s on-platform advertising business, and regulators believe the practices are related to a second-price auction mechanism.
According to reports, the allegations involve approximately 1.2 million advertisers, including a large number of small and midsize businesses and sellers. The FTC and the states involved in the lawsuit contend that advertisers may have entered auctions and incurred additional costs without understanding the full fee structure. These points are allegations raised by regulators in the lawsuit, and the case will proceed through the judicial process.
What does this mean for cross-border sellers?
The lawsuit puts the true cost and fee transparency of on-platform advertising auctions under regulatory scrutiny. Sellers should recheck advertising reports against actual order costs. Do not look only at cost per click or return on ad spend; overlooking surcharges can distort profit assessments. Highest-priority action: This week, review recent spending details by store and advertising campaign, and retain historical reports and billing records.