FTC accuses Amazon of running a ‘secret ad

The FTC and 22 states sue Amazon for secretly charging advertisers more for ad placements, claiming the practice has been hidden for seven years.

The Federal Trade Commission, joined by 22 states, has filed a lawsuit accusing Amazon of operating a covert “ad surcharge” scheme that allegedly inflated costs for advertisers for more than seven years.

Allegations and Scope of the Lawsuit

According to the complaint, Amazon purportedly concealed a mandatory fee on its advertising platform, charging advertisers an undisclosed surcharge that could increase their billings by up to 30 percent. The FTC claims the company deliberately kept the fee hidden from both advertisers and its own sales teams, violating antitrust and consumer‑protection laws.

The lawsuit asserts that Amazon’s internal documents reveal a systematic effort to mask the surcharge, including instructions to sales representatives to avoid mentioning the fee and to describe the pricing model as “transparent.”

Impact on Advertisers

Advertisers, ranging from small businesses to large brands, allegedly paid the hidden surcharge without knowledge, affecting campaign budgets and ROI calculations. The FTC argues that the undisclosed fee distorted market competition by giving Amazon an unfair advantage over rival ad platforms that disclose all costs upfront.

Small‑business sellers who rely on Amazon’s marketplace for visibility
National brands running large‑scale ad campaigns on the platform
Third‑party agencies managing client spend through Amazon’s ad services

Legal and Regulatory Response

The FTC is seeking injunctive relief to halt the alleged practice, restitution for affected advertisers, and civil penalties. The 22 participating states are pursuing similar remedies under state consumer‑protection statutes.

Amazon has denied the allegations, stating that its advertising pricing is fully disclosed in contractual agreements and that any alleged surcharge is a mischaracterization of standard service fees.