Consumers Affected
1,200,000
Colorado Attorney General Phil Weiser joined the FTC and 22 state attorneys general in filing a lawsuit against Amazon for manipulating the auctions used to set advertising prices, replacing actual auction results with higher prices since 2019 and overcharging nearly 1.2 million U.S. advertising customers. The FTC estimates total improper surcharges from 2018 to 2026 exceed $20 billion, with costs ultimately passed to shoppers through higher prices. The states seek a permanent injunction and monetary relief; no penalty has been imposed yet as this is a newly filed complaint.
The states are asking the court to grant a permanent injunction to prevent future violations of their consumer protection laws, award monetary relief within the court's authority for the overcharged advertising customers, and any additional relief the court determines to be just and proper. No fine or settlement has been entered yet because the complaint was just filed.
In-house teams should review advertising services agreements, media buying contracts, and marketplace/seller agreements with Amazon and comparable ad platforms (e.g., Google, Meta, Walmart Connect) for pricing transparency and fee integrity protections. Key clauses to examine include: representations or warranties that ad prices are determined by genuine competitive auctions; disclosure obligations covering all fees, surcharges, and post-auction price adjustments; audit rights over ad spend and underlying auction data; cost pass-through provisions that shift advertising costs into customer or consumer prices; indemnification and remedy clauses for overcharges or deceptive pricing practices; and compliance-with-law provisions that expressly cover state consumer protection acts such as the Colorado Consumer Protection Act. Companies that resell advertising services or allocate platform ad costs to clients should also check customer contracts for pricing adjustment and fee disclosure terms that may need updating in light of alleged auction manipulation.
Entity
Amazon.com, Inc.
Industry
Retail"against Amazon, the world’s largest e-commerce platform"
"Aug. 31, 2026 (DENVER)"
"for illegally overcharging nearly 1.2 million U.S. advertising customers by manipulating the auctions it uses to set the price of ads on its platform"
"nearly 1.2 million U.S. advertising customers"
"The FTC has estimated total improper surcharges from 2018 to 2026 to be over $20 billion."
"Amazon conduct violates the Colorado Consumer Protection Act."
$2.5B
A federal court approved a revised order in the FTC's Amazon Prime case under which Amazon will accelerate and expand redress payments under the September 2025 $2.5 billion settlement, which resolved allegations that Amazon enrolled millions of consumers in Prime subscriptions without their consent and knowingly made cancellation difficult. More consumers now qualify for refunds, the maximum payment cap rises from $51 to $200, and all future payments will be distributed automatically starting October 1, 2026, with potential supplemental $149 payments by April 2027. Amazon has already issued more than $845 million in redress payments as of September 2026.
Texas Attorney General Ken Paxton sued Amazon.com, Inc. on August 31, 2026, alleging Amazon deceived advertisers by claiming to run second-price auctions while secretly applying hidden surcharges and undisclosed 'soft reserve' prices that pushed winners' costs up by roughly 17% on ordinary days and more than 25% during peak events like Prime Day. The hidden surcharges generated roughly $4.5 billion in additional nationwide revenue in 2024, and more than 18,000 Texas sellers and vendors advertise on the platform. The State brings claims under the Texas Deceptive Trade Practices Act, seeking civil penalties of up to $10,000 per violation, an injunction against inaccurate auction descriptions, and per-auction pricing records for every Texas advertiser; the FTC and a coalition of other states filed a parallel federal action the same day.
New York Attorney General Letitia James, joined by 21 other states and the FTC, sued Amazon for secretly overcharging its advertising customers more than $20 billion by submitting fake second-place bids to inflate ad auction prices since 2018. More than 1.2 million advertisers, including hundreds of thousands of small businesses, were allegedly overcharged. The coalition seeks a court order stopping the scheme plus penalties, restitution, and damages.
$1.0B
The FTC secured a $2.5 billion settlement with Amazon, including a $1 billion civil penalty and $1.5 billion in consumer refunds, for enrolling millions of consumers in Prime subscriptions without proper consent and designing a deliberately difficult cancellation process. The order requires Amazon to implement clear enrollment disclosures, an easy cancellation method, and cease the unlawful practices.
$25.0M
The FTC and DOJ charged Amazon with violating COPPA by indefinitely retaining children's Alexa voice recordings and failing to honor parents' deletion requests. Under a proposed consent decree, Amazon must pay $25 million, delete children's data, and implement privacy safeguards.
The FTC, Utah, and Nevada sued Lens.com Inc., alleging that it advertised artificially low contact lens prices while hiding mandatory checkout charges and misleading consumers about its AutoRefill subscription. The complaint seeks to stop the alleged practices; the court has not yet decided the case, and no penalty or remedy has been imposed.