Florida joins 21 other states in FTC suit accusing Amazon of rigging ad auctions

The Federal Trade Commission and 22 states, including Florida, have filed a lawsuit against Amazon, claiming the company added a hidden surcharge to advertising prices that was then passed down to consumers, making products more expensive.

The complaint, filed in the U.S. District Court for the Western District of Washington, alleges that Amazon for years claimed that the winners of its advertising auctions would only pay one penny more than the next-highest bidder. In reality, the complaint alleges, Amazon added a hidden surcharge and created a fake auction participant to increase the alleged bidding prices of advertisements. This created a scenario where, instead of advertisers paying just one cent more than the second-place bid, Amazon charged advertisers their own winning bid and created fake bidders to justify the price. This happened 80% of the time, the lawsuit alleges.

“Amazon told Florida businesses they were bidding in a fair auction. That was false,” Florida Attorney General James Uthmeier said in a press release announcing the lawsuit. “Amazon hid a surcharge, padded its own profits, and those costs landed on Florida families buying groceries, medicine, and everyday essentials. Amazon should expect to be held accountable.”

In addition to Florida, the attorneys general of Alaska, Arizona, California, Colorado, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington are also suing Amazon over the puported scheme.

The company fires back, claiming that the FTC’s complaint cites no evidence of consumer price increases

Amazon denied the allegations in their own press release, calling the suit "misguided" and saying it provides customers with “the lowest prices every day across the widest selection of products, and work to ensure our retail and grocery prices meet or beat those offered by other retailers.”

The company claimed that the FTC’s complaint cites no evidence of consumer price increases or advertiser harm. Further, Amazon said that the average cost-per-click for sponsored products search ads was flat between 2019 and 2024, adjusted for inflation, noting that conversion rates grew 24% between 2021 and 2025.

“The FTC’s claim fundamentally misunderstands how advertisers operate. Advertisers adjust bids based on real-world performance, not descriptions of auction mechanics. Even accepting the FTC’s flawed premise that advertisers do not adjust bids, we estimate they saved over $8 billion from 2021 to 2025 as a result of Amazon prioritizing ad relevancy over selecting ads on bid price alone,” the company said.

Amazon: "a handful of simplified communications"

Amazon also claimed that winning bids fell 50% between 2019 and 2025 and that about 92% of placed ads are not given to the highest bid. “After reviewing approximately 1.5 million pages spanning six years, the FTC leans on a handful of simplified communications to allege a company wide effort to deceive. That is patently false,” the company said.

A company spokesperson did not respond to Just the News’ inquiry regarding the FTC’s claim that Amazon created fake bidders to artificially inflate bidding prices.