Florida joins multistate FTC action accusing Amazon of unfair ad auction tactics

Amazon faces a major new lawsuit

Florida has joined a big lawsuit against Amazon, and it could affect millions of shoppers. Florida sues Amazon over alleged hidden advertising charges, claiming the company secretly raised ad prices for businesses selling on its site.

The Federal Trade Commission and 21 other states are part of this legal action, too. They say Amazon broke the rules by not being honest about how its advertising auctions really worked.

What are ad auctions anyway?

When you search on Amazon, you may see products marked Sponsored in search results. Businesses bid for those ad placements, and they generally pay when shoppers click their ads.

The lawsuit says Amazon told advertisers its auctions were based on a second-price model. Regulators allege Amazon secretly changed how prices were set and added undisclosed surcharges to raise its advertising revenue.

The truth about bid prices

Amazon reportedly told advertisers they would pay only one penny more than the next-highest bidder. That is called a second-price auction, and it is designed to keep bidders from paying more than needed to win.

But the lawsuit claims that, by 2024, Amazon charged Sponsored Products advertisers their own winning bid close to 80% of the time. Regulators say Amazon hid those extra charges from the advertisers it was paying.

Fake bidders made prices jump

Here’s where things get really interesting. The lawsuit alleges that Amazon created a fake auction participant to drive prices higher than they would have gone otherwise.

This made it look like there was more competition than there really was. Sellers ended up paying more because they thought someone else was bidding against them.

Over $20 billion taken nationwide

The numbers in this case are big. Regulators say Amazon allegedly overcharged more than 1.2 million advertising customers by more than $20 billion through its ad auction system.

That includes more than 500,000 small and medium-sized businesses that advertised on Amazon. Florida sellers and vendors alone were allegedly overcharged by hundreds of millions of dollars over more than 4 years, according to officials.

Little-known fact: New York’s attorney general says Amazon has been overcharging advertisers more than $20 billion by manipulating its ad auction system.

How does this affect your wallet?

You might wonder why this matters if you don’t sell on Amazon. Well, when businesses pay more for advertising, they often raise their prices to cover those costs.

The lawsuit claims this led to higher prices on everyday items like groceries and medicine. So those hidden ad fees may have quietly cost you money at checkout, too.

Amazon fires back

Amazon isn’t staying quiet about these claims. The company says the lawsuit is misguided and that its advertising system actually helps businesses reach more customers.

Amazon also says advertisers never pay more than their maximum bid. They claim the average cost per click remained flat from 2019 to 2024 when adjusted for inflation.

Amazon’s side of the story

The company says it focuses on showing ads that are most relevant to shoppers, not just the highest bidder. In fact, Amazon claims 92% of winning ads don’t go to the top bidder.

Amazon also says its system saved advertisers over $8 billion between 2021 and 2025. They believe the FTC’s claims don’t match how things really work.

Little-known fact: Amazon says about 92% of ads placed are not awarded to the highest bidder because it prioritizes ad relevance over bid price.

What regulators found inside

The lawsuit points to internal Amazon documents that regulators say support their case. The FTC says notes from a 2024 discussion described Amazon’s approach as a “clever non-transparent way to charge first price.”

The FTC also says one internal Amazon document described the auction pricing as having “a surcharge hidden in it.” Regulators argue those documents show Amazon knew advertisers were not getting the auction model they expected.

What does Florida want?

Florida Attorney General James Uthmeier is seeking several things through this lawsuit. The state wants Amazon to stop these practices and pay back consumers who were affected.

Florida is also asking for civil penalties and other damages under state consumer protection laws. The goal is to make sure businesses and shoppers are treated fairly.

Other states joined too

Florida isn’t alone in this fight. The attorneys general from Alaska, Arizona, California, Colorado, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, and New York are also involved.

More states joined as well, including North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington. It’s a big group working together on this case.

What happens next?

The lawsuit was filed in the U.S. District Court for the Western District of Washington. Amazon has publicly denied the FTC’s allegations and said it looks forward to making its case in court.

This case could take time to move through the legal system. Both sides are expected to present arguments and evidence before the court reaches a decision.

Curious about other big stories shaping Florida right now? Check out how ICE arrests 500 across Florida in weeklong enforcement operation.

Why does this matter to you?

This case is about more than business deals between Amazon and sellers. It raises questions about whether companies clearly explain how they charge for major online services.

If regulators are right, many shoppers may have paid higher prices without knowing why. That is why people are watching closely to see how this lawsuit develops.

Want to see another promise finally kept in Florida? Check out how Florida Republicans fulfill an environmental promise made by Democrats decades ago.

What’s your take on the Amazon ad fee lawsuit? Do you think shoppers really ended up paying the price? Let us know in the comments.

This slideshow was made with AI assistance and human editing.

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