What changed
FTC and 22 states allege Amazon added a hidden surcharge, a soft reserve price, to its ad auctions from 2019
When
Complaint filed August 31, 2026 in the US District Court for the Western District of Washington
Who it affects
Advertisers on Sponsored Products, Sponsored Brands and Display Ads on Amazon.com and the Amazon app
What to do
Check what you pay per click against your bids, and cap bids at your break-even CPC

Key takeaways

  • The FTC and 22 states allege a hidden soft reserve price raised Amazon ad costs from 2019.
  • Amazon denies it, citing flat inflation-adjusted CPC and 24% higher conversion rates.
  • Cap every bid at your break-even CPC and compare what you pay with what you bid.

The case so far

  1. Soft reserve price added, the FTC alleges

  2. Full bid paid 30% to 40% of the time (FTC)

  3. Full bid paid about 70% of the time (FTC)

  4. Full bid paid about 80% of the time (FTC)

  5. FTC and 22 states file suit in Washington

  6. Amazon denies the claims and publishes its response

What the FTC and 22 states allege

According to the FTC press release, Amazon told advertisers it ran second price auctions, where the winner pays one cent more than the next highest bidder. The complaint alleges that from 2019 Amazon added an undisclosed surcharge it internally called a soft reserve price, so winners often paid their own full bid instead.

The FTC says the share of the time Sponsored Products advertisers paid their own bid rose from 30% to 40% in 2021, to 70% in 2022 and about 80% in 2024. It alleges the surcharges were larger on high-volume days such as Prime Day and Black Friday, that Amazon ramped them up beforehand to disguise them, and that they likely extracted tens of billions of dollars from more than one million brands and sellers, including over 500,000 small and medium-sized businesses.

  • Ad products named: Sponsored Products, Sponsored Brands and Display Ads
  • Period alleged: from 2019 onward
  • Plaintiffs: the FTC plus 22 state attorneys general, including California, New York, Illinois, Florida and Pennsylvania
  • Court: US District Court for the Western District of Washington; the Commission voted 2 to 0 to file

What Amazon says

Amazon denies the claims and has said it will defend its practices. In its published response, as reported by Marketing Dive, Amazon said cost per click for Sponsored Products was flat from 2019 to 2024 after adjusting for inflation while conversion rates rose 24%, and that soft reserve prices are common in the ad industry.

Amazon also said average winning bids on Sponsored Products search ads fell 50% from 2019 to 2025, and argued that advertisers adjust bids based on real-world performance, not descriptions of auction mechanics. These are Amazon's statements and the FTC's are allegations; no court has ruled on either.

The claims side by side

FTC and states allegeAmazon says
AuctionHidden soft reserve priceReserve prices are industry norm
What advertisers paidOwn bid about 80% of the timeWinning bids fell 50% 2019 to 2025
CostsTens of billions extractedCPC flat after inflation
Peak daysHigher surcharges on Prime DayNo harm to advertisers or shoppers

Where the case stands

The complaint was filed on August 31, 2026. The FTC press release does not state the remedies it is seeking, and cases like this usually take a long time to resolve. We will update this story when there is a ruling, a settlement or a change in how Amazon describes its auctions.

What advertisers should check now

Whatever the outcome, the case is a reminder that the price you pay per click is not always far below your bid. That makes bid discipline more important, especially going into Black Friday and Cyber Monday. These steps are practical account hygiene, not legal advice.

  • Compare average CPC with your bids by campaign and keyword; if CPC sits close to your bid, assume you pay what you bid
  • Set every bid from margin: the highest CPC you can afford is price x conversion rate x target ACoS (our break-even ACoS calculator does the math)
  • Cap bids and placement adjustments before Prime Day and BFCM instead of raising them blindly
  • Keep exports of your search term and bid reports; they are your record of what you paid
  • If you think you were harmed, talk to a lawyer; the FTC takes reports at ReportFraud.ftc.gov

How PPC Spider handles bids

At PPC Spider, SpiderOS sets each product's maximum bid from its real margin after fees and checks average CPC against bids daily, so a campaign can never pay more per click than the product can afford. Our Amazon PPC management team logs every bid change with its reason, and our guide to Amazon CPC explains the auction in more detail. If you want a second look at what you are paying, start with a free Amazon audit.

Sources

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