Event date: August 31, 2026
Case: Federal Trade Commission et al. v. Amazon.com, Inc.
Case number: 2:26-cv-03097
Court: U.S. District Court for the Western District of Washington
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What happened on August 31?
The Federal Trade Commission and 22 state attorneys general sued Amazon, alleging that the company used a concealed pricing mechanism inside certain Sponsored Ads auctions. The plaintiffs are Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington. U.S. District Court filing via FTC
The complaint asserts 49 federal and state counts. The five FTC theories concern alleged misrepresentations, deceptive auction manipulation, concealment, unfair omissions, and unfair billing practices. State counts arise under the participating states’ consumer-protection and related laws. Filing counts are claims to be proven; they are not findings by the court.
The government’s core allegation
Plaintiffs say Amazon taught advertisers that Sponsored Ads used generalized second-price auctions, in which a winner would ordinarily pay what was needed to beat the next-ranked competitor rather than the winner’s full maximum bid. According to the complaint, Amazon later added an internally calculated “soft reserve” or “proxy 2nd price” and could charge that amount when it exceeded the competition-generated price, up to the maximum bid.
The complaint quotes internal materials describing an “invented auction participant.” The government characterizes the alleged mechanism as a secret surcharge or artificial price setter. Amazon disputes that description and says reserve prices are normal in advertising auctions. Federal Trade Commission
Who the government says was affected
The FTC estimates that approximately 1.2 million U.S. advertising customers were affected, including more than 500,000 small and medium-sized businesses. It refers broadly to brands and sellers and alleges tens of billions of dollars in excess charges. These are government estimates, not adjudicated damages, and the population estimate is not a count of eligible claimants.
What relief the plaintiffs requested
The complaint asks for a permanent injunction, monetary relief within the court’s power, and other relief the court considers appropriate. State plaintiffs also invoke remedies that may include restitution, disgorgement, civil penalties, costs, and injunctive relief, depending on the law at issue. California’s attorney general expressly described requested remedies including restitution and disgorgement. California Department of Justice
No amount has been awarded. The filing did not create an advertiser settlement fund, refund program, or claim process.
Amazon responded the same day
Amazon published a detailed response denying that it deceived or harmed advertisers. It says Sponsored Ads auctions rank advertisements substantially by expected relevance rather than raw bid alone, that bids are understood as maximum CPCs, and that the government’s second-price account oversimplifies the system. Amazon
Amazon also points to its own measures of advertiser outcomes. It says inflation-adjusted Sponsored Products CPCs were approximately flat from 2019 through 2024, conversion improved, and its modeling indicates the FTC’s preferred alternative would have made advertisers about $8 billion worse off from 2021 through 2025. Those assertions are Amazon’s position and have not been adjudicated.
What the filing did not decide
- It did not establish that Amazon violated the law.
- It did not prove that a particular advertiser was overcharged.
- It did not certify a class action or determine claim eligibility.
- It did not order restitution or create a refund process.
- It did not resolve how relevance, reserves, bids, and disclosure operated in any particular auction.
What happens next?
The parties’ court filings, motions, evidence, and eventual rulings will determine the case. As of September 2, 2026 at 5:53 p.m. PT, the matter remains pending, no liability ruling or settlement has been announced, and a complete live PACER docket has not been certified by this site. Follow the canonical case overview, timeline, and document library for context.