The Federal Trade Commission (FTC), which is a U.S. government agency tasked with protecting consumers and ensuring fair competition, has joined forces with 22 states to file a lawsuit against Amazon. The lawsuit claims that Amazon has been secretly overcharging its advertising customers for seven years by manipulating the way it sets ad prices. This alleged scheme involves "auctions," a common method used by online platforms to determine the cost of ads. In these auctions, advertisers bid for the right to display their ads to consumers, and the highest bidder typically wins. However, the lawsuit states that Amazon has been overriding the auction results to charge more than what the competitive bidding would allow. According to the legal action, which was filed in the U.S. District Court for the Western District of Washington, Amazon has been altering the outcomes of these auctions since at least 2019. The FTC claims that the company has secretly added extra charges—referred to as "hidden surcharges"—to the prices of ads for Sponsored Products, Sponsored Brands, and Sponsored Display. These are the types of advertisements that appear alongside product search results on Amazon's website. The FTC says that internal documents and messages obtained during its investigation show how Amazon has systematically inflated the costs for advertisers. The lawsuit estimates that Amazon's alleged misconduct has potentially cost advertising customers more than $20 billion in extra charges over the years. The FTC investigation began in 2024 and uncovered evidence of what the agency calls "billions of rigged auctions." These auctions, the lawsuit claims, have been manipulated to ensure that advertisers are charged more than they would have been in a fair, competitive process. The FTC argues that this behavior has deprived consumers of the benefits of competition and fair business practices. The lawsuit is supported by a bipartisan group of 22 state attorneys general from across the United States, including Alaska, California, New York, and Washington. The legal action accuses Amazon of continuing this deceptive practice "to this day," highlighting that the alleged overcharging has been ongoing and widespread. The FTC and the states involved are seeking to hold Amazon accountable for what they describe as a long-term scheme that has unfairly benefited the company at the expense of its advertising customers.