Court Rules
All enforcement actions
Enforcement ActionCritical RiskMultistate

NJ AG, FTC, and 21 States Sue Amazon for Rigging Advertising Auctions and Overcharging Advertisers

AmazonAugust 31, 2026New Jersey Attorney General

Consumers Affected

500,000

Summary

On August 31, 2026, New Jersey Attorney General Jennifer Davenport and the Division of Consumer Affairs joined the FTC and a bipartisan coalition of 21 other states in suing Amazon, alleging that for over seven years the company secretly rigged its advertising auctions—converting advertised 'second price' auctions into first-price auctions with hidden 'soft reserve price' surcharges—overcharging more than 500,000 small- and medium-sized businesses and extracting tens of billions of dollars. The complaint alleges Amazon actively concealed the surcharges, gave false and misleading answers to advertisers who asked directly about the auction format, and applied inflated upcharges on high-volume shopping days like Prime Day and Black Friday. The lawsuit was just filed; no penalties or remedies have been imposed yet.

Remedy

No remedies have been imposed yet—the coalition filed its complaint on August 31, 2026. The lawsuit alleges tens of billions of dollars in illegal overcharges extracted from advertisers; any monetary penalties, restitution, or injunctive relief would be determined as the litigation proceeds.

Contract Impact

In-house teams that purchase digital advertising—particularly under Amazon Ads agreements (Sponsored Products, Sponsored Brands, Display Ads) or similar platform terms with Google, Meta, or other ad marketplaces—should review advertising services agreements, media buying contracts, and incorporated platform policies for pricing methodology representations (e.g., 'second price auction' or generalized second-price/GSP descriptions), fee schedule and surcharge disclosure clauses, and notice requirements for pricing or auction-rule changes. Key clauses to scrutinize include representations and warranties about how ad prices are set, pass-through surcharge provisions, competitive-pricing representations, audit and billing verification rights, refund or credit remedies for overbilling, and amendment/change-notice mechanics that would let a platform alter pricing unilaterally. Companies that resell advertising services or pass ad costs to customers (agencies, marketplace sellers, retail media partners) should also review customer contracts' cost pass-through and pricing transparency provisions, since inflated platform fees may have flowed downstream, and procurement should preserve bid logs and invoices to quantify potential overcharges.

Contract Search Terms

second price auctionadvertising pricing methodologyhidden surchargefee disclosureprice change noticeadvertising services agreementbilling audit rightsauction mechanicscost pass-through

Laws Cited

New Jersey Consumer Fraud ActSection 5(a) of the FTC Act
N.J.S.A. 56:8-1 et seq.

Violation Types

Entity Details

Entity

Amazon

Industry

Technology

Multistate Coalition

FTCAlaska AGArizona AGCalifornia AGColorado AGFlorida AGIdaho AGIllinois AGIndiana AGIowa AGKentucky AGLouisiana AGMaryland AGNebraska AGNew York AGNorth Carolina AGOklahoma AGPennsylvania AGRhode Island AGSouth Carolina AGVermont AGWashington AG

Official Sources

Source Evidence

Entity Name
"in a lawsuit against Amazon alleging that, for over seven years, the e-commerce tech giant secretly and systematically overcharged its advertisers"
Event Date
"For Immediate Release: August 31, 2026"
Jurisdiction
"Attorney General Jennifer Davenport and the Division of Consumer Affairs (DCA) joined the Federal Trade Commission (FTC)"
Event Type
"joined the Federal Trade Commission (FTC) and a bipartisan coalition of 21 other states in a lawsuit against Amazon"
Violation Types
"Amazon changed its auction rules without notice by adding an undisclosed surcharge that Amazon referred to internally as a “soft reserve price.”"
Consumers Affected
"including over 500,000 small- and medium-sized businesses"

Related Enforcement Actions

NJ

Trump Administration

A multistate coalition co-led by New Jersey won a federal court order rejecting the Trump Administration’s decision not to request funding for the CFPB. The order struck down that decision and directed the Administration to follow the law and fund the agency; no monetary penalty or privacy violation is described.

NJ

Mitragynine pseudoindoxyl, MGM-15, and MGM-16

New Jersey’s Attorney General and Division of Consumer Affairs alerted the public that three synthetic kratom-related compounds became illegal to possess or sell in the state under a temporary federal scheduling order. The release describes a controlled-substance alert, not a privacy enforcement action, and identifies no company, privacy violation, or monetary penalty.

NJ

Laboratory Corporation of America Holdings (LabCorp)

$2.3M

Laboratory Corporation of America Holdings agreed to pay $2,287,455 to participating states and strengthen its security and vendor-management practices following an investigation into the 2019 breach at its debt-collection vendor, AMCA. The breach potentially exposed information of more than 27.5 million people nationwide, including sensitive information belonging to approximately 10.2 million LabCorp patients.

NJ

Credit Acceptance Corporation (CAC)

$694.0M

New Jersey's Attorney General and Division of Consumer Affairs, along with 41 Attorneys General, reached a $694 million settlement with subprime auto lender Credit Acceptance Corporation over allegations it originated unaffordable loans its own systems predicted borrowers could not repay, employed aggressive debt-collection tactics, and failed to prevent deceptive vehicle-service contract and GAP product 'packing' by dealers. The multistate settlement stepped in after the CFPB permanently dropped its 2023 enforcement action against CAC in 2025. CAC will provide $60 million in cash restitution, $634 million in debt relief, an additional $15 million to the states, and implement injunctive lending reforms including loan off ramps, pre-loan disclosures, add-on packing safeguards, and a seven-year vehicle price cap. Note: this is a consumer-protection lending enforcement action, not a privacy matter; violation categories are best-fit mappings from the available taxonomy.

NJ

Match Group, Inc.

$650K

The New Jersey Attorney General and Division of Consumer Affairs announced that Match Group, Inc. will pay $650,000 and change its business practices to settle allegations that it misrepresented or failed to disclose its criminal background screening policies and practices to New Jersey users, violating the New Jersey Consumer Fraud Act and the Internet Dating Safety Act. Under a Consent Order, Match must accurately represent its screening policies, notify existing New Jersey members of updated disclosures within 150 days, and post clear and conspicuous disclosures and safety notifications about the limitations of criminal background screenings.

NJ

Glenmark, Lannett, Bausch, Apotex, Heritage, and Emcure

$96.5M

New Jersey and a coalition of states and territories obtained preliminary approval for a plan to distribute funds from settlements with generic drug manufacturers accused of conspiring to raise drug prices. The settlements total approximately $96.5 million, and eligible consumers may submit claims for compensation.