Alaska joins FTC, 21 other states in lawsuit accusing Amazon of deceptive ad practices

State AG says online retailer overcharges ad customers by manipulating auctions; company says its ‘approach to pricing contradicts ⁠any suggestion of consumer harm’

An Amazon company logo marks the facade of a building, March 18, 2022, in Schoenefeld near Berlin. (AP Photo/Michael Sohn, File)

By Mark Sabbatini

Juneau Independent

A lawsuit accusing online retailer Amazon of misleading advertising customers by inflating auction prices for ads appearing on the company’s website has been filed by the Federal Trade Commission and 22 states, including Alaska.

A press release issued by the Alaska Department of Law, mirroring similar statements by the FTC and other states, claims Amazon "systematically and secretly" raised prices for 1.2 million brands and sellers placing ads by manipulating the auction bidding process and adding undisclosed surcharges.

“The way Amazon abused its role as auctioneer resulted in businesses around the country, including Alaskan small businesses, being overcharged for their advertisements,” Acting Alaska Attorney General Cori Mills said in a prepared statement. “This doesn’t just matter for businesses: when Amazon increases the cost to advertisers on its platform, the natural consequence is for those costs to be passed on to consumers in the form of higher prices." The FTC’s lawsuit targets Amazon’s auction rules since 2019, claiming more than $20 billion was earned from excess prices during that time.

The primary target of the lawsuit involves so-called "second-price auctions," a standard industry practice for online auctions, where Amazon told bidders they would pay only "one cent more" than the second-place bidder, but in reality were charged the amount they bid about 80% of the time. Among the company’s practices, according to the FTC, was entering its own secretive bids in auctions to drive up prices.

Amazon, in a blog post Monday, denied wrongdoing, ‌saying the average cost per click for advertisers remained flat from 2019 to 2024, and sales generated from those clicks rose during that time.

“Amazon’s approach to pricing contradicts ⁠any suggestion of consumer harm,” the company said. “We provide customers the lowest prices every day across the ⁠widest selection of products, and work to ensure our retail and grocery prices meet or beat those offered by other retailers.”

The FTC has previously sued Amazon in 2025 for tricking customers into enrolling in Prime and then making it difficult to cancel, with the company paying a $2.5 billion settlement, and in 2023 for allegedly Amazon for operating a monopoly, which remains pending in federal court

• Contact Mark Sabbatini at editor@juneauindependent.com or (907) 957-2306.