Trump administration sues Amazon: "Charged advertisers $20 billion through manipulation"

The US Federal Trade Commission (FTC) filed a lawsuit today against Amazon, claiming that the e-commerce giant "secretly and systematically" overcharged advertisers on its platform by manipulating its pricing and auction systems. This is reported by CNBC.

The lawsuit, joined by 22 US state attorneys general, alleges that Amazon raked in over $20 billion from advertisers through the use of "hidden surcharges," following a change in auction rules that took effect in 2019. According to the lawsuit, the company interfered with its internal bidding system and submitted fictitious bids to inflate advertising costs for more than 1.2 million businesses.

"Amazon has millions of advertising customers who paid significantly higher prices because of deception," said FTC Chairman Andrew Ferguson. "These higher costs were largely passed on to American consumers."

Amazon called the FTC's lawsuit "misguided." The company stated that the commission "does not understand how advertisers operate," and that the agency's lawsuit "contains no evidence of price increases for consumers."

Amazon operates the third-largest digital advertising machine in the world, trailing only Google and Meta. The company raked in more than $68 billion in advertising revenue last year, with the bulk coming from the sale of sponsored ads.