FTC Complaint Alleges Amazon Inflated Merchant Ad Costs by Billions Through Undisclosed Floor Price Adjustments

The FTC filing asserts that Amazon adjusted reserve prices in its demand-side platform during events such as Prime Day and holiday seasons, passing incremental costs to sellers while maintaining the appearance of stable auction mechanics. Internal documents cited in the complaint show revenue from these adjustments exceeded $2 billion annually in peak quarters. Amazon's incentive structure rewards higher ad spend volume; any reduction in seller participation would directly affect both advertising and marketplace margins.

Regulators gain procedural leverage by framing the practice as a hidden tax rather than a disclosed pricing algorithm. This aligns with the post-2021 shift in FTC enforcement priorities under Chair Lina Khan, emphasizing structural platform power over narrow consumer harm tests. Amazon's documented response in prior proceedings has been to treat such adjustments as standard yield management, consistent with its 2012-2022 pattern of layering new revenue streams onto the seller ecosystem without explicit contract amendments.

The case intersects with parallel EU Digital Markets Act obligations and ongoing state attorneys general actions, raising the probability of coordinated settlement demands. Primary records show Amazon has previously accepted injunctive relief on pricing transparency in exchange for preserving algorithmic flexibility. Next steps hinge on whether the Commission seeks structural remedies or monetary penalties exceeding the alleged surcharge totals.