The Federal Trade Commission (FTC) and 22 state attorneys general filed a lawsuit against Amazon on August 31, 2026. The complaint accuses the company of illegally inflating advertising prices through a secret surcharge system for over seven years.
The lawsuit alleges the scheme overcharged more than one million sellers and brands by tens of billions of dollars. While Amazon marketed its platform as a standard second-price auction, it reportedly manipulated the system to force advertisers to pay their full bid amount 80% of the time.
Plaintiffs contend these inflated advertising costs resulted in higher product prices for consumers. The coalition is seeking civil penalties, refunds for affected advertisers, and a court order to stop the deceptive practices.
Amazon denied the allegations and labeled the lawsuit misguided. The company stated the FTC misunderstands how its advertising system operates and delivers value to users.