The antitrust and consumer-protection watchdog FTC, along with multiple state attorneys general, has been probing whether Amazon misled its advertising customers, and the pace of that inquiry picked up last year. The inquiry, led by the agency's consumer protection division, has focused in part on whether Amazon adequately disclosed terms and pricing for its ads - often labeled "sponsored listings" or "sponsored ads" - that can surface at the top of product results when people search Amazon's marketplace.
Bloomberg has reported that an enforcement move could arrive as early as this summer and that a lawsuit could expose Amazon to civil penalties totaling in the billions. A person with knowledge of the situation said the lawsuit could be filed as soon as Monday, and that several states are expected to join. Earlier, The Wall Street Journal reported that the FTC intended to submit the case on Monday.
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Amazon, in a statement sent via email, asserted that FTC investigators have mischaracterized the mechanics of its ad auctions and have failed to present proof of harm to shoppers. The company said its system ranks items by how closely they match a shopper's search before factoring in bid size, which Amazon argues helps customers find relevant products and restrains advertisers' costs. The company also said the typical cost per click in its search ads has been essentially unchanged after inflation between 2019 and 2024, while ad performance improved. A spokesperson for the FTC did not promptly return a request for comment.
Another lawsuit would extend an ongoing series of disputes pitting Amazon against the FTC, which has been examining multiple parts of the company's operations going back to at least 2019. Last year, Amazon finalized a $2.5 billion settlement to conclude a separate investigation focused on its Prime subscription practices. Separately, a trial is scheduled for early next year on claims that the company is unlawfully monopolizing online retail markets, hurting shoppers' experience, and charging sellers too much.
