FTC and 22 States File Lawsuit Claiming Amazon Secretly Overcharged Advertisers Since 2019

The Federal Trade Commission, together with attorneys general from 22 states, has lodged a federal lawsuit accusing Amazon of covertly inflating the fees it charges advertisers, a practice alleged to have begun in 2019 and to persist to the present day.

The complaint asserts that Amazon employed undisclosed pricing mechanisms that resulted in advertisers paying more than the rates publicly presented, effectively misleading businesses that rely on the platform's ad services. Plaintiffs say the company concealed these extra charges within its billing system, preventing advertisers from accurately assessing campaign costs.

Under the FTC's mandate to curb deceptive trade practices, the agency is seeking injunctive relief and civil penalties, while the participating states are pursuing comparable state-level remedies. The joint action reflects a coordinated effort to address what regulators describe as a systematic pattern of deception that extends across multiple jurisdictions.

Amazon’s advertising division has become a pivotal revenue source as the e‑commerce giant expands its marketplace and cloud offerings. Brands of all sizes depend on the platform to reach shoppers, making transparent pricing a cornerstone of the digital advertising ecosystem. Allegations of hidden overcharges therefore raise concerns about fairness and competition in an industry already scrutinized for its opacity.

Legal experts note that the case could set a precedent for how large technology platforms disclose advertising rates and manage billing practices. A ruling against Amazon might compel other digital intermediaries to adopt more explicit pricing structures, potentially reshaping the economics of online marketing.

The lawsuit is slated for proceedings in federal court, where both the FTC and the state attorneys general will present evidence of the alleged overcharging scheme. Should the court find merit in the claims, Amazon could face substantial penalties and be required to overhaul its advertising billing procedures, while a settlement could lead to refunds for affected advertisers and new compliance safeguards.