Amazon ads charged hidden markups, FTC says
The FTC unsealed details of its lawsuit against Amazon over allegedly inflated advertising prices between 2021 and 2023. Here's what changed and what to check.
The Federal Trade Commission and 22 state attorneys general revealed new details in November about their lawsuit against Amazon, alleging the company secretly raised the prices advertisers paid for search ads. The complaint says Amazon increased advertising costs by up to 50% above normal auction results on regular days, and by as much as 250% when major shopping events occurred between 2021 and 2023. This matters to you if you ran ads on Amazon during that period—you may have paid more than the auction should have cost.
Key facts
- The FTC and state attorneys general filed the original lawsuit in August in the Western District of Washington and unsealed additional details in November.
- The complaint says Amazon used reserve pricing that was not disclosed to advertisers while describing how its auctions worked in ways the FTC calls misleading.
- Internal Amazon emails cited in the complaint show executives discussing the need for $40 million more in 2023 revenue to meet financial targets.
- When advertisers asked Amazon directly why costs jumped during peak shopping periods, account managers allegedly gave misleading responses about auction changes.
- The alleged conduct covered businesses of all sizes running ads during peak shopping periods between 2021 and 2023.
How Amazon's reserve pricing system worked
Amazon uses something called soft reserve prices in its ad auctions. This is different from a minimum bid to enter the auction. According to Amazon, an advertiser might win a placement even when bidding less than the reserve and would then pay only that lower bid. But the FTC says Amazon used these reserves to secretly increase what advertisers actually paid, without explaining how the system worked. The complaint says Amazon continued to describe its auctions in misleading ways even when advertisers asked directly whether the auction process had changed.
Should you review your past Amazon ad spending
If you ran Amazon ads between 2021 and 2023, this is worth examining. Pull your campaign reports from those years and look for sharp cost-per-click jumps during major retail events. Your reports show what you paid and the performance you got, but they don't show how Amazon calculated the final cost. You cannot know from your own data whether you were charged a hidden surcharge. What you can do is note the dates and amounts of unusual spikes, then compare them to what you know about your bidding strategy at the time. If you remember questioning Amazon about price increases back then, dig up that correspondence.
What happens next with the lawsuit
This case is still being litigated in federal court. Amazon has denied deceiving or harming advertisers and defended its reserve pricing. The company says advertisers never pay more than their maximum bid. The unsealed complaint covers conduct through 2023, but earlier FTC materials discuss alleged conduct in 2024 as well. It is not yet clear whether the alleged practices continued past 2023 or which specific Amazon ad formats were affected. The case will take time to resolve, and any settlement or judgment could take months or years.
What this means for your Amazon advertising now
The lawsuit does not tell you whether Amazon changed its practices after 2023 or whether the alleged surcharges are still happening. You should continue monitoring your cost-per-click trends and watch for unexplained spikes. If you see sharp increases during peak shopping periods without a clear reason, ask your Amazon account manager to explain the change in writing. Keep records of those explanations. Going forward, treat your Amazon ad account the same way you would treat any vendor relationship: track your costs, understand what you are paying for, and ask questions when numbers move. This lawsuit is a reminder that even large platforms can have practices worth scrutinizing.
Sources
- FTC Unseals Details In Amazon Ads Auction Surcharge Suit via @sejournal, @brookeosmundson - Search Engine Journal, November 5, 2026
- Samsung’s Galaxy Z Fold 8 is $300 off ahead of Black Friday - The Verge, November 5, 2026
- How do I benchmark my AI search performance against my industry? - HubSpot, November 4, 2026
They did the reporting. The writing and the opinions here are ours.
Questions people ask about this
Did Amazon overcharge me for ads between 2021 and 2023
The FTC alleges Amazon secretly increased advertising costs by up to 50% on regular days and up to 250% during major shopping events during that period. Your campaign reports show what you paid, but not how Amazon calculated the price. You cannot know from your own data whether you were charged a hidden surcharge.
What is a soft reserve price in Amazon ads
A soft reserve price is different from a minimum bid required to enter an auction. According to Amazon, an advertiser might win a placement even when bidding less than the reserve and would then pay only that lower bid. The FTC alleges Amazon used these reserves to secretly increase what advertisers paid without explaining how the system worked.
Can I get a refund for Amazon ads I paid for during this period
The lawsuit is still being litigated in federal court. Amazon denies the allegations. Any settlement or judgment could take months or years. You should consult with a lawyer if you believe you were overcharged, but the outcome of this case is not yet decided.
Is Amazon still using hidden surcharges on ads now
The unsealed complaint covers conduct through 2023. It is not yet clear whether the alleged practices continued past 2023. You should monitor your cost-per-click trends and ask your Amazon account manager to explain any unexplained spikes in writing.
What should I do if I ran Amazon ads during 2021 to 2023
Pull your campaign reports from those years and look for sharp cost-per-click jumps during major retail events. Note the dates and amounts of unusual spikes. If you remember questioning Amazon about price increases back then, find that correspondence and keep it.
Does this lawsuit affect other advertising platforms
This lawsuit is specific to Amazon. It does not address how other platforms like Google or Facebook handle their ad auctions. You should apply the same scrutiny to all your advertising vendors: track costs, understand what you are paying for, and ask questions when numbers move.
This piece is about FTC Unseals Details In Amazon Ads Auction Surcharge Suit via @sejournal, @brookeosmundson, published by Search Engine Journal. Go read the original; the opinions here are ours and the reporting is theirs.
