Amazon.com IncAMZN
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FTC lawsuit over ad auction practices could lead to damages and changes in advertising methods.
Impact on stocks 1
Artificial Intelligence
Amazon.com IncAmazon.com Inc. is facing a new legal challenge from the Federal Trade Commission and 22 U.S. states, which allege the company secretly inflated minimum prices in advertising auctions, costing advertisers at least $20 billion. The FTC may seek billions in damages, and the complaint claims Amazon participated in up to 80% of sponsored-product auctions, sometimes placing its own bids without disclosure. Amazon denies the allegations, stating that average advertising cost per click was unchanged from 2019 through 2024 and that it saved marketers around $8 billion between 2021 and 2025. The lawsuit targets Amazon's advertising unit, which generated $68.6 billion in revenue in 2025, a 22% increase, with second-quarter ad revenue climbing 26% to $19.8 billion. Shares of Amazon fell about 2.5% following the news, and investors are watching whether the case results in a financial penalty or changes to its advertising methods.
Amazon.com IncFTC lawsuit over ad auction practices could lead to damages and changes in advertising methods.