The Federal Trade Commission and 22 states filed a federal lawsuit against Amazon.com Inc. for allegedly manipulating advertising auctions. Regulators claim the company unlawfully extracted over $20 billion from more than 1.2 million advertisers.
The complaint alleges Amazon misrepresented its system as a second-price auction while using an invented participant to drive prices higher. These undisclosed tactics reportedly impacted over 500,000 small and medium-sized businesses.
This legal action adds to a separate 2023 monopolization case brought by the FTC. Amazon denied the claims, stating its advertising policies are designed to provide relevant results for shoppers.
Amazon shares (AMZN) traded lower during Tuesday pre-market sessions following the news.