FTC: Amazon inflated ad prices by as much as 250 percent on Prime Day

Declassified parts of the complaint show how much extra advertisers were allegedly made to pay in 2021-2023. This matters for companies comparing current campaigns with those seasons.

The U.S. Federal Trade Commission (FTC) and the attorneys general of 22 states filed an amended, largely declassified complaint against Amazon on Thursday, November 5. According to it, on ordinary days the company raised ad prices in its search engine by as much as 50 percent above the auction result. On Prime Day (Amazon's annual sale for Prime members) and Black Friday, the surcharges allegedly reached 250 percent. The information comes from an FTC announcement (opens in a new tab) and from Search Engine Journal's summary of the complaint.

The original lawsuit was filed on August 31, 2026, in the U.S. District Court for the Western District of Washington. It concerns a soft reserve price. This auction mechanism may have raised the final cost per click (CPC) above the level that competitors' bids would have produced.

The declassified parts provide examples from 2021-2023:

• in the 2021 holiday season, average CPC rose by 20 percent, and for some advertisers by more than 200 percent,
• in the 2022 holiday season, the surcharges allegedly generated $87 million (approx. PLN 320 million) in additional revenue,
• on Prime Day 2023, one large food industry advertiser paid more than 100 percent more, and Amazon internally acknowledged that the increases lowered its return on ad spend (ROAS) and hurt campaign performance.

The complaint also cites an email from the head of Amazon Ads about the need to obtain at least $40 million through reserve prices in order to close the 2023 financial plan. According to the FTC, an account manager replied to an advertiser who asked about the auction change that nothing had changed in the auction and that the increase in CPC resulted from greater competition. The FTC considers that response misleading.

Amazon denies that it deceived advertisers. It says advertisers never pay more than their maximum bid. According to Marketing Dive, the company also points out that in 2019-2024, CPC for Sponsored Products (product ads in Amazon search results) did not change after adjusting for inflation, while conversions increased by 24 percent. Amazon has not yet publicly responded to the new details. The allegations have not been decided by the court.

Search Engine Journal advises companies advertising on Amazon to review CPC and ROAS data from the 2021-2023 seasons before Black Friday, because they may have been inflated by the alleged surcharges, and in current campaigns to track cost per click separately from the conversion rate.