FTC Unseals Amazon Ads Surcharge Claims: What Sellers Should Do

What happened

The Federal Trade Commission and 22 state attorneys general have filed an updated complaint against Amazon with previously redacted sections now visible. The case, filed in the Western District of Washington, alleges Amazon covertly raised the prices advertisers paid in its search ad auctions. According to a report from Search Engine Journal, the unsealed material adds specific numbers and internal discussions to the original lawsuit.

The complaint alleges Amazon pushed prices up to 50% above auction results on ordinary days. During major shopping events such as Prime Day and Black Friday, the alleged increases reached 250%.

The examples that stand out

The unsealed sections cover 2021 to 2023:

• 2021 holiday season: average CPC allegedly rose 20%, with some advertisers seeing increases above 200%.
• 2022 holiday season: Amazon allegedly raised its hidden surcharges to generate an extra $87 million in worldwide revenue.
• Prime Day 2023: a large food and beverage advertiser allegedly faced increases of more than 100%. The complaint says Amazon internally acknowledged the increases were "destroying campaign performance."

The complaint also links the mechanism to revenue goals. It quotes an email from the head of Amazon Ads asking for help closing gaps to plan, with at least $40 million from reserves described as helpful.

How the mechanism works

The case centers on "soft reserve prices." These are not minimum bids. They can lift the final CPC above what competing bids would have produced. Amazon's position is that advertisers can win placements below the soft reserve and pay their bid, and that no one pays more than their maximum bid. The company has denied deceiving or harming advertisers and defended its reserve pricing in its response to the original suit.

The FTC's argument is that Amazon used undisclosed reserve pricing to raise charges while describing the auctions in misleading terms.

The explanation problem

The complaint also describes advertisers asking Amazon whether the auction had changed. In one instance, an advertiser asked whether something had changed in the second-price process, by design or mistake. The FTC alleges the account manager said there was no bug and no change in auction style, and blamed a more crowded marketplace.

That matters because campaign reports show what you paid and what you got back. They do not show how the final CPC was calculated. If the allegations hold up, advertisers were reading cost spikes as market competition when part of the cause was a pricing lever they could not see.

Why this matters for sellers and agencies

These are allegations, not findings. The case is still being litigated, and Amazon has not publicly responded to the newly unsealed details. The source also notes the FTC's summary doesn't say whether the practices continued past 2023 or exactly which ad formats were affected, although earlier FTC materials mention alleged conduct in 2024 and name Sponsored Products, Sponsored Brands and Display Ads.

Even so, the practical impact is real. Many teams use 2021 to 2023 peak-season data as a benchmark. If those periods contain inflated costs, your targets for CPC, ROAS and ACoS may be skewed.

What to do now

1. Audit your peak-event baselines. Look at CPC and ROAS from Prime Day and Q4 in 2021 to 2023. Flag those windows in your reporting instead of treating them as normal.
2. Brief stakeholders with context. If you had to explain a ROAS drop to a client or finance team, the unsealed allegations give you documented background. Present them as allegations, not settled fact.
3. Split CPC from conversion rate. During Black Friday and Cyber Monday, track CPC, conversion rate and impression share side by side. That shows whether a weaker result comes from click costs or from shoppers buying less.
4. Don't depend on one channel. Amazon Ads is often the highest-intent paid channel for sellers, but opaque pricing is a reason to test other sources of demand. Look at Google Shopping, email, and your own site's organic and AI search visibility.
5. Keep your own records. Save screenshots and exports of CPC and spend during peak events. If the case produces any remedy, clean records will help you.

What to watch next

Keep an eye on Amazon's formal response to the unsealed material and any court rulings on reserve pricing. Also watch for any change in how Amazon documents its auction rules, since more transparency would help you judge whether a cost spike is competition or pricing policy.