The Federal Trade Commission (FTC) and more than a dozen state attorneys general are planning to sue tech giant Amazon on allegations that the company fixed prices for advertising spots on its retail platform, according to a report from the Wall Street Journal.
The lawsuit is expected to be filed in federal court in Seattle and joined by a bipartisan group of more than 20 state attorneys general, according to agency officials cited in the report. States expected to join the case include New York, California and Florida.
On Monday, The Desk received an e-mail from California Attorney General Rob Bonta’s office about a planned press conference to discuss a consumer protection action. The notice did not say whether it was related to the Amazon case; the press conference is scheduled for 4 p.m. Eastern Time.
The FTC will allege Amazon deceived advertisers by secretly raising the minimum price they had to pay to place ads promoting their products. Officials said advertisers paid billions of dollars more for ads as a result. The participating states, which have authority to seek civil penalties, could attempt to recover some of that money.
Amazon operates the world’s third-largest digital advertising platform behind Google and Meta Platforms. The company reported $68 billion in advertising revenue in 2025, according to securities filings cited in the report.
The FTC’s case centers on Amazon’s advertising auction system, where merchants compete for ads that increase the visibility of their products when shoppers search on the platform. Agency officials said Amazon began changing its auction strategy in 2018 to raise advertiser prices in a way merchants would not detect.
Amazon had historically used an auction format designed to attract more bids while protecting winning bidders from paying significantly more than necessary. The FTC will allege the company later began inserting its own bid, known as a “soft reserve,” above the price of the next-highest bidder. Under the auction rules, that increased the amount the winning advertiser paid.
Agency officials said Amazon knew the merchants’ competing bids and did not disclose the practice. The FTC will allege Amazon executives tracked the additional money generated by the strategy, referred to internally as a “surcharge,” and initially used it on major shopping days when higher ad prices could be attributed to stronger competition.
Officials said Amazon has intervened in auctions to raise the minimum price 70 percent to 80 percent of the time in recent years. The FTC’s claims include an allegation that the strategy increased pay-per-click ad costs by 50 percent on major shopping days.
Amazon has disclosed on a public webpage that it uses “reserve pricing” that “may affect the cost of your ad,” and says reserves can help allocate ad space by setting a bid threshold. Company officials have not commented on the pending lawsuit.
The case will be the third time the FTC has brought a major action against Amazon. Last year, the company agreed to pay $2.5 billion to settle a case over allegations that its Prime membership was deliberately difficult for consumers to cancel.
