A multistate coalition led by the Federal Trade Commission has made public the hidden passages of its Amazon ad pricing lawsuit, which alleges the company secretly inflated what advertisers pay in its search auction. Twenty-two states joined the filing. The details matter to anyone buying Sponsored Products or Sponsored Brands placements, because they put numbers on a pricing mechanism advertisers could not see. All of it remains allegation, and no court has ruled.
According to an FTC press release dated Thursday, November 5, the unsealed portions claim Amazon added up to 50% over the auction outcome on ordinary days. On big shopping events such as Prime Day or Black Friday, the alleged markup reached 250%. The agency and its state partners first sued in August, filing in federal court in Seattle’s district. The new filing restores facts that had been blacked out.
The complaint ties the surcharges to specific seasons. Per the FTC, Amazon lifted the average price advertisers paid per click by 20% in the 2021 holiday season, and some advertisers saw increases above 200%. In the 2022 holiday season, the complaint alleges, the surcharges added $87 million to Amazon’s revenue worldwide.
Size did not protect advertisers, the FTC says. A big grocery-and-drinks brand allegedly saw its Prime Day 2023 prices rise over 100%. Amazon’s own staff, according to the complaint, acknowledged that the increases hurt that brand’s ad returns and were “destroying campaign performance.”
The revenue motive is the most pointed claim. In 2023, executives allegedly discussed finding an additional $40 million to meet corporate financial targets. The complaint quotes an email from the head of Amazon Ads asking to “pull out all of the stops (without doing unnatural acts)” to close gaps to plan, with reserves of at least $40MM described as helpful.
The second allegation concerns what advertisers were told. When advertisers asked whether “something has changed with respect to the second price auction process,” Amazon allegedly reassured them that rising costs reflected more competition. In one cited exchange, an account manager said there was no bug or change in auction style and attributed higher CPCs to a more crowded marketplace. The FTC calls that statement false.
Amazon has denied deceiving advertisers. In its response to the August suit, it said advertisers never pay more than their maximum bid. That defense deserves attention, because a second-price auction can legitimately charge less than a bid ceiling. A cap on bids does not rule out a price set above what the auction alone would produce, and the case will turn on that gap. The FTC release offers no independent audit of the figures, and the quoted numbers are the plaintiffs’ characterizations.
For search teams, the practical issue is diagnosis. Advertisers on marketplace platforms have long been told that holiday CPC spikes are demand. If the allegations hold, some of that spike was pricing policy, and no campaign setting could have fixed it. Amazon sponsored placements also compete for the same shoppers who find products through organic search, so cost swings change how much budget flows to each channel.
Teams planning Black Friday spend should compare this year’s Amazon CPCs against their own prior-year baselines and against bid caps before the weekend, and log any unexplained jumps with dates and campaign IDs, since that record is what a refund claim or an audit would rely on.
Federal Trade Commission press release, “New Details Emerge in Amazon Ads Auction-Rigging Case,” published November 5, 2026.
