FTC’s Amazon Ad Lawsuit Is A Cash Grab
- The FTC is lacking clear evidence of consumer harm, a continuation of the regulators’ posture during the Biden Administration
- Online shoppers already treat sponsored content as ads and are less likely to engage with it than with organic content
WASHINGTON, DC — SEPT 1, 2026— On Monday, the Federal Trade Commission and 22 state attorneys general filed a lawsuit against Amazon over how the company has priced its internal advertising auctions. The Consumer Choice Center, a nonpartisan consumer advocacy organization, said the lawsuit is nothing more than an elaborate attempt at a cash settlement, not genuine consumer protection.
“This is regulation by litigation, plain and simple. The FTC’s plan here is to get nearly two dozen state governments on board, pick a company with deep pockets, invoke consumers who never got the advertising bill, and squeeze until they extract a giant payout,” said Yaël Ossowski, deputy director of the Consumer Choice Center.
“If Amazon misrepresented its ad auctions, advertisers who overpaid can prove losses. But regulators should not rebrand a dispute with sophisticated buyers as consumer protection just because that label funds a larger settlement.”
The FTC complaint says Amazon billed Sponsored Products as a “second-price” auction, where the winner pays just above the next-highest bid. Regulators allege hidden reserve prices and surcharges instead caused those advertisers to pay their full bids about 80% of the time by 2024. The agency does not claim Amazon shoppers were charged those fees or paid more at checkout.
Shoppers already treat sponsored listings as ads. A 2024 study found that consumers preferred organic listings to sponsored listings for the same product in the same position and treated organic results as more credible.
“Consumers know a sponsored listing is an advertisement,” Ossowski added. “If the FTC and the states cannot name shoppers who lost money, they should stop using families as cover for a government cash grab. Consumer-protection law should pay the people who were actually overcharged. It should not be a revenue play against a politically convenient target.”
The Consumer Choice Center called on the FTC and participating attorneys general to:
- Disclose how any requested award maps to proven losses
- Reveal how much recovered money would reach the advertisers rather than governments, administrators, or outside counsel.
If Amazon broke its promises to advertisers, it should answer for that in court. Size does not put a company above the law, nor does it give regulators a shortcut around consumer harm.