FTC and 22 states sue Amazon over alleged secret ad surcharge scheme

Updated on: August 31, 2026 / 4:00 PM EDT / CBS News

The Federal Trade Commission and 22 states on Monday sued Amazon over allegations that the e-commerce giant secretly inflated prices in its online search advertising auctions, potentially costing customers tens of billions of dollars.

The lawsuit alleges that the undisclosed surcharges were applied for seven years, increasing the prices that more than 1 million Amazon brands and sellers were required to pay to advertise on its platform.

The FTC's lawsuit was joined by the attorneys general of Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont and Washington.

The lawsuit centers on so-called second-price auctions, the industry standard for digital ad deals. Amazon informed businesses that they would pay only "one cent more" than the second-place bidder for an advertising keyword, but the lawsuit alleges that the retailer charged the winners their own price about 80% of the time.

That raised costs for businesses, alleged the FTC and states joining the suit.

"When one of the world's largest online retailers engages in unfair and deceptive conduct, the impact can be staggering,"…

Original source: https://www.cbsnews.com/healthwatch/