US FTC sues Amazon over alleged $20 billion ad auction manipulation

The Federal Trade Commission, joined by 22 state attorneys general, has launched legal action against Amazon over allegations that the company manipulated its advertising auction system to overcharge advertisers. The lawsuit centres on accusations that Amazon engaged in deceptive practices affecting an estimated 1.2 million advertisers on its platform.

According to the complaint, Amazon is alleged to have rigged its ad auction mechanism to inflate prices for vendors seeking to promote products on Amazon.com. The coordinated action represents one of the most significant regulatory challenges to Amazon's advertising business, which has emerged as a major revenue driver for the Seattle-based company.

The case highlights growing scrutiny of big technology firms over their advertising practices and the terms they impose on third-party sellers. Small businesses, in particular, have faced mounting costs to maintain visibility on Amazon's platform, with the complaint noting that over 500,000 small businesses were among those allegedly affected by the scheme.

Amazon has previously faced regulatory pressure from antitrust authorities across multiple jurisdictions over allegations of anti-competitive conduct. The company's advertising division has become increasingly crucial to its financial performance, making the sector a focal point for regulators examining market competition and fair trading practices in the digital economy.