The FTC Amazon advertising lawsuit alleges sellers paid their own bid amount roughly 80% of the time by 2024. Amazon calls the case misguided and says average winning bids have fallen since 2019.
Amazon says the typical winning bid on Sponsored Products search ads fell by half between 2019 and 2025. I have not met one seller who thinks their Amazon PPC got cheaper in that window.
That gap between the official number and what sellers actually experience is exactly what the FTC Amazon advertising lawsuit is fighting about. One side says a hidden charge inflated what winners paid, the other says relevancy scoring saved advertisers billions.
Both things can be true at once, and that is what makes this case genuinely hard to read. Here is what the filing says, what Amazon says back, and what it changes for your account.
- 00:00 – FTC Sues Amazon Over Advertising Prices
- 01:38 – Amazon Responds to the FTC Advertising Lawsuit
- 03:20 – How Amazon Advertisers Set PPC Bids
- 04:58 – Amazon Sponsored Products Winning Bid Data
- 06:18 – Why the Highest Amazon PPC Bid Does Not Always Win
- 07:24 – What the FTC Amazon Lawsuit Means for Sellers
What the FTC Amazon Advertising Lawsuit Alleges About Your Bids
The FTC’s announcement of the suit against Amazon lays the core claim out plainly. Amazon told advertisers it ran an Amazon second price auction, where the winner pays a penny more than whoever came in second, and then started charging something else.
Starting in 2019, the complaint says, Amazon added a charge it never disclosed and referred to internally as a soft reserve price. The agency describes it as a bid placed by a participant that was never really in the auction, sitting there to push the final number up.
The escalation is the part worth sitting with. The complaint alleges that Sponsored Products advertisers paid their own full bid between 30 and 40% of the time in 2021, around 70% in 2022, and close to 80% by 2024.
That figure is already being misquoted. The 80% refers to auctions you won, not advertisers.
Andrew N. Ferguson, Chairman, Federal Trade Commission"Amazon has millions of advertising customers who were misled into paying significantly higher prices."
Filed in the U.S. District Court for the Western District of Washington, the case covers more than 1 million brands and sellers, including about 500,000 small and midsize businesses like most of our readers.
Amazon Says the Complaint Misreads How Sellers Bid
Peter Adams at Marketing Dive walked through Amazon’s rebuttal. Amazon pointed reporters to a long blog post rejecting the idea that either shoppers or advertisers were harmed.
The company argues that cost per click on Sponsored Products held flat from 2019 through 2024 once you adjust for inflation, while conversion rates rose 24%. It argues that advertisers paid the same and got more in return.
Amazon said the FTC’s argument misrepresents how advertisers operate.The company also says soft reserve pricing is common across the ad industry and that regulators pulled a few lines out of older, simplified internal documents.
Adams points out this is the third FTC case against Amazon in recent years, following the Prime settlement and the retail monopoly case headed to trial. That detail tells you more about the timeline than any of the legal arguments do.
The Numbers Both Sides Bring to the Amazon Ad Auction Lawsuit
Bethany Lee at Performance Marketing World gathered the competing figures in one place, and lining them up side by side is the quickest way to see where the disagreement actually sits.
| Point of dispute | What the FTC alleges | How Amazon responds |
|---|---|---|
|
Full-bid frequency |
Rose from 30 to 40% in 2021 to roughly 80% by 2024 on Sponsored Products |
The auction weighs relevancy, and advertisers are never charged above the maximum bid they set |
|
Cost per click |
Hidden surcharges raised prices, with steeper increases on Prime Day and Black Friday |
Flat from 2019 through 2024 once adjusted for inflation |
|
Winning bid size |
Advertisers bid higher because they believed a second price auction protected them |
Advertisers bid higher because they believed a second price auction protected them |
|
Money at stake |
More than $20 billion pulled from 1.2 million advertisers |
Roughly $8 billion saved between 2021 and 2025 because relevancy outranks bid size |
Amazon’s whole defense rests on relevancy. The company says it never charges you more than the ceiling you set, and that weighting ads by relevance saved advertisers money rather than costing them.
The suit asks the court for money back for affected advertisers. Whether any of it reaches your account is a separate question, and I would put those odds low.
Why the Highest Amazon PPC Bid Does Not Always Win
I broke this down in the video on the My Amazon Guy channel, and one Amazon statistic jumped out at me. The company says roughly 92% of placed ads do not go to the highest bidder.
I have been saying a version of that for years. Setting a $1,000 bid on a search term does not buy you the placement, because the algorithm weighs how relevant your product is for that query first.
Here is where the two stories meet, and it is the part almost nobody is covering. Amazon can be completely right that relevancy beats bid size, and the FTC can still be right that a hidden floor raised what the winner actually paid.
So should you lower your bids because of the lawsuit? No. Use your conversion data to determine what each click is worth and bid accordingly.
If you want to know whether you are overpaying, the answer sits in your account, not in a 150-page complaint. Pull your search term report and total up the spend on terms that produced no sales in the last 60 days.
Then check whether your cost per click climbed on keywords where your conversion rate stayed flat. That gap between rising cost and steady performance is the closest thing to a personal Amazon PPC bid surcharge number you are going to get.
That is the same place our Amazon advertising management team starts on every new account, and it is also the opening step in a PPC advertising audit.
Google Is Fighting the Same Kind of Auction Claim
Ariel Zilber at the New York Post reported in January that The Atlantic sued Google over its digital advertising business. The magazine accused Google and Alphabet of rigging auctions through secret programs and pushing publishers into its own set of tools.
A Google spokesperson called the allegations meritless and said advertisers and publishers choose its ad tech because it works and costs less than the alternatives.
I mention it because the pattern is the real story. When one company builds the auction, writes the rules, and collects the money, somebody eventually asks to see the math.
Amazon's Ad Business Is Too Big for a Quiet Exit
Statista’s data on Amazon advertising in the United States shows why the company will spend heavily to win this fight. Global ad revenue reached $49 billion in 2023, nearly triple what it brought in during 2019, while the combined US market share held by Google and Meta keeps shrinking.
Advertising is high margin income for Amazon, and the auction is the engine underneath it. A court order forcing changes to how auction pricing gets disclosed would cost far more than any fine attached to this case.
So here is my honest read on what the FTC lawsuit means for Amazon sellers. I expect a settlement with a lot of zeros in it, a press release from both sides, and an ACoS that sits exactly where it does today.
The useful move is the one you actually control. Get real eyes on your own bid data and stop accepting a climbing cost per click as the cost of doing business.
If you want a second opinion on where your spend is going, our Amazon agency run a free account audit that starts with the same numbers I described above.
