FTC and 22 States Sue Amazon Over Alleged Ad Price Inflation

The lawsuit, filed in the Western District of Washington, claims Amazon’s pricing maneuvers forced advertisers to pay significantly more to promote their products on the platform. Prosecutors argue these hidden adjustments harmed businesses while bolstering the company’s bottom line. The states involved in the filing are now seeking civil penalties and potential restitution for the affected advertisers.

Amazon rejected the allegations in a public statement, asserting that its advertising policies prioritize showing shoppers the most relevant results. The company defended its record by citing internal data, claiming the average cost per click remained stable between 2019 and 2024 despite a rise in sales generated by those ads. Amazon shares dipped roughly 3% following the announcement of the litigation. This legal challenge follows a separate 2023 settlement where the company agreed to pay $2.5 billion to resolve claims regarding deceptive Prime subscription practices.