The Federal Trade Commission plans to sue Amazon on Monday over allegations the company rigged its ad auctions to squeeze more money from sellers, according to a Wall Street Journal report. The news sent Amazon shares down more than 3% Monday afternoon, erasing roughly $86 billion in market value.
The alleged scheme
At the center of the case is a practice Amazon started in 2018. The company allegedly placed a bid just above the runner-up in its ad auctions — a so-called 'soft reserve' — to push up the minimum price sellers had to pay. Amazon never told sellers about the change in auction mechanics, the report said.
The tactic first appeared on busy shopping days. Over time it spread, and now it lifts the minimum in 70% to 80% of auctions. On peak days, click prices climbed 50%. The alleged manipulation earned Amazon tens of billions of dollars over seven years, according to the report.
Amazon's seller guidance, updated in April, does mention reserve pricing. But that came years after the alleged practice began.
What's at stake
Ads are a huge part of Amazon's business. They brought in $69.6 billion in 2025, close to a tenth of Amazon's $716.9 billion in sales. That's a high-margin revenue engine, and a judge rewriting the auction rules would hit it directly.
More than 20 state attorneys general are joining the FTC lawsuit. Amazon already paid a $1 billion civil penalty last September over Prime sign-ups, so this isn't the company's first run-in with regulators.
A slow legal road
Antitrust cases against big tech don't move fast. A judge ruled against Google's ad business in 2025, but the remedy is still unsettled. That shows how slowly such cases play out, and Amazon's fight could drag on for years.
Amazon stock traded at $257.87 early Monday afternoon, down from a $266.43 close. The lawsuit is expected to be filed Monday, and the case will likely take years to resolve.
