FTC Files Ad Auction Suit Against Amazon With 20+ State AGs

The complaint centers on Amazon's shift from second-price auctions with a visible reserve to a mechanism in which the platform itself entered a higher soft-reserve bid drawn from its knowledge of all merchant offers. This change was rolled out selectively on high-traffic days and tracked internally as a surcharge, according to agency officials cited in the WSJ reporting. Merchants had no visibility into the platform's participation, contrary to auction rules previously communicated to advertisers.

Amazon's advertising segment reported $68 billion in revenue for 2025, placing it behind only Google and Meta. The alleged conduct occurred while the company simultaneously faced a $2.5 billion Prime subscription settlement and a separate monopolization case scheduled for trial in 2026. State AGs are expected to seek restitution for affected advertisers, creating a direct fiscal incentive for the coalition.

The filing illustrates the U.S. government's recurring pattern of using consumer-protection statutes to extract revenue from platform incumbents whose market position generates measurable rents. Amazon's documented internal tracking of surcharge revenue and efforts to limit external awareness indicate a calculated risk calculation rather than inadvertent design.

Next steps include Amazon's likely motion to dismiss on auction-disclosure grounds and parallel settlement discussions. Any monetary resolution will set a benchmark for the pending monopolization trial and for similar claims against other ad platforms.