Amazon Accused of Secretly Overcharging Billions in Ad Auctions


By Lily Jamali | North America technology correspondent • 31 August 2026


Amazon logo


Amazon Secretly Overcharged More Than a Million Advertising Customers


According to the lawsuit filed on Monday, the alleged scheme has likely netted the firm roughly $20 billion (£14.8 billion) from advertising customers since 2019. The complaint claims that Amazon "overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits."


Amazon responded promptly, saying it "strongly disagrees" with the premise that it misled advertisers and calling the suit "misguided." It further maintained that the FTC "fundamentally misunderstands how advertisers operate," adding that "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."


The lawsuit also argues that the higher charges affect consumers, as the additional costs are passed on to shoppers. "Consumers are suffering, have suffered, and will continue to suffer substantial injury as a result," the complaint states.


Amazon’s share price fell about 2.5% on the day the lawsuit was announced, closing lower on Monday. This legal challenge joins a previous $2.5 billion settlement relating to the company’s Prime subscription practices.


Amazon’s advertising ecosystem relies on sponsored product and branded ads that appear when users search for keywords. These placements are auctioned to the highest bidder, usually using a "second price" model: advertisers are billed the next highest bid plus a small increment. The complaint alleges Amazon instead charges its own winning bid, often as close to 80% as possible, effectively subverting the auction.


While Amazon disputes the allegations, the lawsuit’s claims highlight growing concerns about market dominance and fairness in digital advertising. Whether courts will find Amazon’s tactics unlawful remains to be seen, but the case could set a precedent for future antitrust scrutiny of online marketplaces.