The Federal Trade Commission and 22 state attorneys general have filed a lawsuit accusing Amazon of using a 'secret ad surcharge' to raise the price of advertising on its website and app.
Key facts
- The FTC and 22 state attorneys general are suing Amazon.
- The suit alleges Amazon used a 'secret ad surcharge' to drive up ad prices on its website and app.
- FTC chairman Andrew Ferguson said the higher ad prices 'were largely passed on to American consumers.'
- The claims were detailed in a blog post from Ferguson accompanying the lawsuit.
The Federal Trade Commission, joined by 22 state attorneys general, has filed a lawsuit against Amazon over what it describes as a ‘secret ad surcharge’ used to drive up prices for advertising on the company’s website and app, according to The Verge.
FTC chairman Andrew Ferguson set out the agency’s case in a blog post accompanying the lawsuit. He claimed the higher advertising prices ‘were largely passed on to American consumers,’ framing the alleged practice as one that ultimately affected shoppers rather than only advertisers.
The lawsuit centres on the way Amazon prices ads that appear across its platforms. The agency alleges the surcharge was applied in a manner that was not transparent, describing the conduct as secret and systematic in its public messaging around the case.
As reported by The Verge, the case links Amazon’s advertising business to costs borne by everyday consumers, a connection the FTC emphasised through Ferguson’s statement that the alleged pricing was passed on to American shoppers.
The available details come from The Verge’s coverage and the FTC chairman’s blog post. Amazon’s response to the allegations, the full specifics of the claims, and the remedies the regulators are seeking were not detailed in the available sources and would be expected to emerge as the case proceeds.
Why it matters
Amazon's advertising arm is a major part of its business, and the FTC's allegation that inflated ad costs were passed on to consumers ties the case directly to everyday prices. A coordinated suit by federal and state regulators could have significant implications for how large platforms price and disclose advertising.
Frequently asked questions
Who is suing Amazon?
The Federal Trade Commission and 22 state attorneys general have filed the lawsuit, according to The Verge.
What does the lawsuit allege?
It alleges Amazon used a 'secret ad surcharge' to drive up prices for advertising on its website and app.
How does the FTC say this affected consumers?
FTC chairman Andrew Ferguson said in a blog post that the higher advertising prices 'were largely passed on to American consumers.'