GRABAR LAW OFFICE INVESTIGATES CLAIMS THAT AMAZON OVERCHARGED BUSINESSES THAT PAID FOR ADVERTISING ON AMAZON
Did your business pay Amazon for Sponsored Products, Sponsored Brands, or Sponsored Display advertising at any time since 2019?
Grabar Law Office is investigating potential claims on behalf of businesses and other advertisers that paid Amazon.com, Inc. ("Amazon") for Sponsored Products, Sponsored Brands, or Sponsored Display advertising. The investigation follows a complaint filed on August 31, 2026, by the Federal Trade Commission and a coalition of state attorneys general alleging that Amazon secretly manipulated the auctions used to price those advertisements and charged advertisers more than the auctions otherwise would have produced.
THE INVESTIGATION
Amazon has long represented to advertisers that its Sponsored Ads prices are set through competitive "second price" auctions. In such an auction, the winning advertiser is supposed to pay only the minimum amount necessary - generally one cent more - to beat the next-highest competing bid.
According to a complaint filed on August 31, 2026 by the Federal Trade Commission and a coalition of state attorneys general, it is alleged that Amazon began developing a different pricing system in 2018 and, since approximately 2019, has secretly overridden the prices produced by its advertised auction process. According to the complaint, after determining the winning and second-place bidders, Amazon replaced the auction-generated cost-per-click with a higher "proxy" price calculated by Amazon to increase its profits and reduce the cost efficiency of advertisers' campaigns.
The complaint alleges that Amazon internally referred to the difference between the auction-generated price and the amount charged to advertisers as an auction "surcharge." It further alleges that Amazon concealed those surcharges, tested increases to determine whether advertisers would detect them, and used features designed to mask the higher prices while continuing to tell advertisers that competitive second-price auctions determined their costs.
THE ALLEGED HARM TO ADVERTISERS
The complaint alleges that Amazon's conduct caused substantial overcharges and higher advertising costs for approximately 1.2 million U.S. advertising customers, including more than 500,000 small and midsize businesses.
According to the complaint, advertisers could not determine whether the price charged was the minimum amount necessary to win an auction, as Amazon had represented, or an inflated price created by Amazon. The complaint estimates that the challenged practices likely extracted more than $20 billion from advertisers.
WHO MAY BE AFFECTED?
Potentially affected advertisers include Amazon Marketplace sellers, consumer-product brands, manufacturers, retailers, publishers, authors, and other businesses that paid for Sponsored Products, Sponsored Brands, or Sponsored Display campaigns during the relevant period.
The central screening question is whether the business bore the cost of the Amazon advertising charges. A business may still be relevant to the investigation if an advertising agency managed its campaigns, provided that the business ultimately paid or reimbursed the Amazon advertising charges.
WHAT YOU CAN DO NOW
If your business directly paid Amazon for Sponsored Products, Sponsored Brands, or Sponsored Display advertising at any time since 2019, Grabar Law Office would like to speak with you. Your business may have a claim to recover alleged advertising overcharges and related damages.
Contact Joshua H. Grabar at jgrabar@grabarlaw.com or call (267) 507-6085. There is no cost or obligation to speak with us.