# FTC Says Amazon Inflated Ad Auction Prices by Up to 250% on Peak Days

- URL: https://usa-24.com/amazon-ad-auction-lawsuit-ftc/
- Publisher: USA 24
- Section: Tech News & Analysis
- Published: 2026-11-06T14:01:37.425Z
- Updated: 2026-11-06T14:01:37.433Z
- Topics: Amazon, FTC Antitrust, Digital Advertising, Prime Day, Big Tech Regulation

> The FTC and 22 states say Amazon's search ad auctions carried hidden surcharges of up to 250% on Prime Day and Black Friday. Here is what the unredacted filing shows.

## Key takeaways

- The FTC and 22 states allege Amazon raised search ad prices by up to 50% above auction results on ordinary days and up to 250% on Prime Day and Black Friday.
- The complaint says executives discussed needing an extra $40 million in 2023 to meet corporate revenue targets, and Law360 reports $87 million in alleged worldwide surcharge revenue.
- Amazon denies the claims and says inflation-adjusted average cost-per-click for Sponsored Products stayed broadly flat from 2019 to 2024.
- The filing date is disputed: Digital Watch says October 28, 2026, while the FTC announced the unredacted complaint on November 5.
- No sources reviewed confirm a refund program, so advertisers should document their costs now and check any claim options with counsel.

Amazon allegedly pushed search ad prices up to 250% above auction results on Prime Day and Black Friday, according to unredacted allegations that the Federal Trade Commission and 22 states released on November 5. The newly public details include internal emails and specific figures that had been largely blacked out since the agency sued in August. The timing matters because brands are setting holiday ad budgets now, and Amazon's ad platform is a large cost for many of them.

Amazon denies the allegations. In response to the updated filing, an Amazon spokesperson said, "we strongly disagree with the FTC's claims."

## What the Amazon ad auction lawsuit alleges

The amended complaint says Amazon raised prices by as much as 50% above auction results on ordinary days, and by as much as 250% on major shopping days such as Prime Day and Black Friday. The allegations appear in the [FTC's press release](https://www.ftc.gov/news-events/news/press-releases/2026/11/new-details-emerge-amazon-ads-auction-rigging-case) and in a [Digital Watch summary](https://dig.watch/updates/ftc-file-updated-complaint-against-amazon). MediaPost, citing the Wall Street Journal, reported that the suit alleges prices more than tripled on Prime Day, Black Friday and other major shopping days.

The case covers Sponsored Products, Sponsored Brands and Display Ads, three of Amazon's advertising products. The filing also includes dollar figures. According to the complaint as summarized by [Search Engine Journal](https://www.searchenginejournal.com/ftc-unseals-details-amazon-ads-auction-surcharge-suit/596010/) and [PYMNTS](https://pymnts.com/cpi-posts/amazon-accused-of-rigging-ad-auctions-with-hidden-fees-of-up-to-250), executives discussed needing an extra $40 million in 2023 to meet corporate revenue targets.

Law360 reports that the alleged surcharges raised Amazon's worldwide revenue by $87 million. That figure comes from a paywalled summary, so treat it as reported rather than verified.

One internal email stands out. The complaint quotes Amazon's head of ads writing to a senior vice president of ad products and technology: "I'd like to pull out all of the stops (without doing unnatural acts) to close our gaps to plan." On its own the line is ambiguous, but placed beside the $40 million discussion, it points to revenue targets as a driver of pricing decisions.

The FTC first sued in August in the U.S. District Court for the Western District of Washington. At that time, the agency said the scheme had likely extracted tens of billions of dollars from advertisers. Its earlier estimate, about $20 billion in revenue extracted since 2019, is much smaller than that phrasing, and the sources reviewed do not reconcile the two.

The filing date is also unsettled. Digital Watch says the updated complaint was filed October 28, 2026, while the FTC announced it on November 5.

## How the second-price auction allegedly worked

Amazon's ad auction was marketed as second-price, a model in which the winning advertiser pays just above the next-highest bid. The FTC's theory is that the system actually operated closer to first-price, where winners pay what they bid, with an undisclosed reserve layered on top, according to [PPC Land's coverage](https://ppc.land/amazon-drops-off-screen-ads-from-impression-counts-expects-63-fewer).

The August complaint went further. It described an "invented auction participant" and hidden "proxy 2nd price" bids that the agency called shill bids, meaning bids placed to push up the price paid by others.

The newer details focus on what advertisers were told. The complaint says that when advertisers asked whether the second-price process had changed, Amazon reassured them that the price increases came from more competition. The FTC says that explanation was false.

Relevant Audience, summarizing the complaint, reports that the share of clicks charged at the advertiser's own bid rose from 4% in late 2020 to 79.1% in 2024. That summary does not explain the mechanics behind the shift, so the figure is best read as a trend rather than a full account.

AdExchanger frames the case as part of ad tech's long history of opacity, a pattern in which buyers have had limited visibility into how auctions set their prices. That framing helps explain why the FTC leaned on internal communications rather than public disclosures.

## Amazon's defense and the numbers in dispute

Amazon says the inflation-adjusted average cost-per-click for Sponsored Products stayed broadly flat from 2019 to 2024, and that conversion rates improved. The company also says no advertiser pays more than its bid. Amazon has argued that its ad-relevancy approach saved advertisers money, citing more than $8 billion in savings from 2021 to 2025 and a 50% drop in average winning bids on Sponsored Products search ads from 2019 to 2025. Those figures come from Amazon's own statements and have not been independently verified.

The two sides are measuring different things. A multiyear average cost-per-click can stay flat while prices on a handful of peak days jump sharply, which is the core of the FTC's claim. Advertisers who want to test that claim should look at event-level data rather than yearly averages.

The size of the alleged harm is also contested. The FTC has cited a $20 billion revenue estimate, while its August filing said "tens of billions," and Amazon disputes that any harm occurred.

The filing landed in a jittery market. The Nasdaq Composite fell about 5.5% on November 5, its worst day since April 2025, after a tech selloff pushed the index into correction. Our [coverage of the Nasdaq correction](https://usa-24.com/nasdaq-correction-chip-stocks-selloff/) covers that move, while this story focuses on the ad case.

## Who pays when peak-day ad prices spike

Small businesses are the most exposed. The FTC says the harm affects both small businesses and large advertisers. Holiday budgets are planned around known spikes, so a peak-day price well above auction results can erode return on ad spend even when sales look strong.

Consumers may feel the effect indirectly if ad costs are passed through to product prices. The FTC's framing is that these costs were passed on, but the sources reviewed for this story do not confirm that pass-through, so treat it as unproven for now.

The FTC has been active on pricing practices this week. It also sued [Toast over hidden fees and hard-to-cancel plans](https://usa-24.com/ftc-sues-toast-hidden-fees/), and it issued orders to [Walmart, Uber, Delta and six others on personal-data pricing](https://usa-24.com/ftc-surveillance-pricing-probe-walmart-uber/). The common thread is a regulator pressing companies to explain how prices are set.

## What advertisers can do now

Advertisers that spend heavily on Amazon can take several practical steps while the case moves forward:

- Pull daily cost-per-click and spend data for Prime Day, Black Friday and Cyber Monday from 2021 through 2025, and compare those days with ordinary weeks.
- Log every auction-pricing question you send Amazon and every reply, including any explanation about competition.
- Keep campaign records, invoices and bid settings, which may matter if a claims process appears later.
- Ask your agency for the same event-level data if it manages your Amazon campaigns.
- Ask a lawyer whether any claims could be preserved if the case produces monetary relief.

Do not assume a refund is coming. No sources reviewed confirm a claims process or refund program.

## What happens next in the Amazon case

Several questions will shape how this case affects advertisers. The first is whether the case goes to trial or settles, which is not yet known. The second is whether Amazon changes its ad auction practices, and the company has so far only denied wrongdoing. Independent checks on the $87 million figure and the gap between the $20 billion estimate and the "tens of billions" language would also help. Watch the court docket in Washington state for Amazon's formal response, and watch whether holiday ad costs on Amazon start to look different from the averages the company has published.

## Frequently asked questions

### What does the FTC allege Amazon did in its ad auctions?

The FTC and 22 states allege Amazon raised search ad prices by as much as 50% above auction results on ordinary days and up to 250% on Prime Day, Black Friday and similar days. The agency says Amazon marketed its auction as second-price but operated closer to first-price, with an undisclosed reserve on top. Amazon denies the claims.

### Can advertisers get a refund from the Amazon ad lawsuit?

No sources reviewed confirm a claims process or refund program, and the case is still in litigation. Advertisers who think they were overcharged should save their campaign and cost data and talk with a lawyer about whether any claims could be preserved. Do not assume a payout is coming.

### Which Amazon ad products are covered by the FTC case?

The case covers Sponsored Products, Sponsored Brands and Display Ads. The FTC first sued in August 2026 in the U.S. District Court for the Western District of Washington. The unredacted amended complaint was announced on November 5, 2026.

### Has Amazon responded to the allegations?

Yes. An Amazon spokesperson said, "we strongly disagree with the FTC's claims." Amazon also says inflation-adjusted average cost-per-click for Sponsored Products stayed broadly flat from 2019 to 2024 and that no advertiser pays more than its bid.

## Sources

1. [New Details Emerge in Amazon Ads Auction-Rigging Case](https://www.ftc.gov/news-events/news/press-releases/2026/11/new-details-emerge-amazon-ads-auction-rigging-case)
2. [FTC, States Sue Amazon Over Secret Ad Surcharge Scheme](https://www.ftc.gov/news-events/news/press-releases/2026/08/ftc-states-sue-amazon-over-secret-ad-surcharge-scheme)
3. [FTC Unseals Details In Amazon Ads Auction Surcharge Suit](https://www.searchenginejournal.com/ftc-unseals-details-amazon-ads-auction-surcharge-suit/596010/)
4. [Updated FTC Lawsuit Alleges Amazon Inflated Ad Auction Prices](https://www.mediapost.com/publications/article/419268/updated-ftc-lawsuit-alleges-amazon-inflated-ad-au.html?edition=144378)
5. [FTC Claims Amazon Inflated Ad Auction Prices By 250%](https://www.law360.com/corporate/articles/2546845)
6. [FTC and 22 States file updated antitrust complaint against Amazon](https://dig.watch/updates/ftc-file-updated-complaint-against-amazon)
7. [Amazon Accused of Rigging Ad Auctions With Hidden Fees of Up to 250%](https://pymnts.com/cpi-posts/amazon-accused-of-rigging-ad-auctions-with-hidden-fees-of-up-to-250)
8. [Amazon drops off-screen ads from impression counts, expects 63% fewer](https://ppc.land/amazon-drops-off-screen-ads-from-impression-counts-expects-63-fewer)
9. [FTC unseals Amazon ads complaint: up to 250% surcharges](https://www.relevantaudience.com/ecommerce-marketing/ftc-unseals-amazon-ads-complaint-surcharges/)
10. [The FTC's Amazon Lawsuit Is Ad Tech's History Of Opacity Repeating Itself](https://www.adexchanger.com/platforms/the-ftcs-amazon-lawsuit-is-ad-techs-history-of-opacity-repeating-itself/)
11. [Nasdaq tumbles 5%, Dow plunges more than 1,800 points](https://foxbusiness.com/markets/stocks-nov-5-2026)