FTC Says Amazon Hid Ad Surcharges From Advertisers

An updated, unredacted complaint filed by the FTC and 22 states alleges Amazon charged advertisers above their auction prices through a hidden surcharge.

Updated on Nov. 10, 2026 in Advertising

FTC Says Amazon Hid Ad Surcharges From Advertisers

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The FTC and 22 states released an updated, unredacted complaint alleging Amazon imposed hidden surcharges on its search ad auctions. Amazon disputed the allegations and said advertisers never pay more than their maximum bid.

Why it matters

If the allegations hold, advertisers who believed they were paying second-price auction rates may have paid substantially more than they understood. The case centers on whether hidden pricing mechanisms in digital advertising marketplaces comply with federal consumer protection law.

The complaint alleges surcharges raised average cost-per-click 20% in the 2021 holiday season and earned Amazon $87 million worldwide in 2022 holiday season revenue. Amazon's claims that advertisers saved $8 billion from 2021 to 2025 have not been tested in court.

The players

Federal Trade Commission

The FTC is the U.S. independent agency responsible for consumer protection and antitrust enforcement, and it brought this lawsuit alongside 22 states.

Amazon

Amazon is the American e-commerce and cloud computing company that operates the search advertising platform at the center of the complaint.

The details

The complaint alleges Amazon told advertisers its search ads used a second-price auction but added a hidden surcharge internally called a "soft reserve price" starting in 2019. The FTC and states say the surcharge meant advertisers paid their full bid more often, and the lawsuit was filed August 31, 2026, in federal court in Washington.

2019: Hidden surcharge alleged to have begun.
2021 holiday season: Average cost-per-click alleged to have risen 20%.
2022 holiday season: Surcharges alleged to have earned $87 million in extra revenue.
August 31, 2026: FTC and states filed the lawsuit in the Western District of Washington.
November 5, 2026: Updated, unredacted complaint publicly released.

Market Landscape

The case lands as the advertising industry depends heavily on a few large platforms for search and retail media, where pricing rules are set largely by the platforms themselves. Whether advertisers can verify the auction terms they are charged under will shape competition among ad platforms.

Advertisers who buy Amazon search ads may be paying more per click than the auction terms they were shown suggest. Small businesses running Sponsored Products campaigns should review their actual cost-per-click against bids during peak shopping periods.

The takeaway

Advertisers should check how their search ad costs compare with their bids, especially during high-demand shopping events. Verifying actual per-click charges against stated auction rules can reveal pricing that differs from what a platform describes.