FTC says Amazon quietly raised ad prices up to 250% on sale days
Newly unsealed parts of the FTC's lawsuit say Amazon padded sponsored ad prices by up to 250% during Prime Day and Black Friday, without telling advertisers.
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giftdetect· the right gift in minutesThose "Sponsored" results you see when you search on Amazon may have cost advertisers a lot more than the auction said. According to the FTC, Amazon added a hidden markup of up to 250% on big sale days like Prime Day and Black Friday.
The Federal Trade Commission and others sued Amazon in August over the claim. On November 5, parts of the complaint that had been sealed were made public, and with them came specific numbers.
How Amazon sponsored ads work
Companies bid for ad slots. Each advertiser sets the maximum it will pay per click, and the price it actually pays depends on other bidders' offers and similar factors.
The FTC says Amazon then added its own markup on top of that auction price, using criteria of its own. On ordinary days the increase could reach 50%. On major sale days it could reach 250%.
What the FTC says happened
After Amazon loosened the limit on those markups in December 2021, the FTC says the average cost per click rose 20% over the next five days. Some advertisers saw increases of more than 200%.
The complaint also says the markups added $87 million to Amazon's revenue during the 2022 holiday shopping season.
One advertiser reportedly asked whether the auction had changed. An Amazon representative said there was no system bug and no change in method, and that more advertisers were simply competing. The FTC argues Amazon hid that it was raising prices itself and gave advertisers a false explanation.
What Amazon says
Amazon says the price adjustment reflects the value of the ad space, and that it never charges more than the maximum an advertiser set when bidding. It also says the average cost per click for Sponsored Products ads in search results was roughly flat from 2019 to 2024 once inflation is removed.
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