The Federal Trade Commission and 22 states updated their complaint against Amazon, revealing allegations that the tech company deceptively inflated prices in its online search advertising auction.
Amazon made statements to mislead advertisers about the true cause of price increases, the FTC said in unredacted details from an August lawsuit.
The suit, filed in the Western District of Washington, claimed the online retailer covertly and substantially increased prices charged to advertisers for marketing on Amazon's platforms.
Newly unredacted portions of the suit allege that Amazon secretly raised prices by as much as 50% above auction results on ordinary days and more than tripled prices on major shopping days like Prime Day or Black Friday.
During the 2021 holiday season, Amazon increased advertisers' average cost per click by 20%, with some clients experiencing prices triple the usual amount, the FTC alleged. The following year, Amazon raised its surcharges to increase its revenue by $87 million worldwide, the suit said.
The alleged price increases impacted both small and large businesses, the FTC said. The allegations also claim that Amazon executives added hidden surcharges to meet revenue targets.
When asked by advertisers about the higher prices, Amazon said they were the result of increased competition, the FTC alleged.
"We strongly disagree with the FTC's claims," an Amazon spokesperson said Thursday. "The FTC's claim fundamentally misunderstands how advertisers operate."
Amazon said advertisers adjust bids based on real-world performance, not descriptions of auction mechanics. Average winning bids fell 50% from 2019 to 2025 on sponsored products search ads, and roughly 92% of placed ads are not given to the highest bid, it said.
Advertisers don't pay more than their bid, the company said.
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