FTC Amazon Ads Lawsuit Raises Auction Disclosure Questions for DSP Buyers
The FTC's lawsuit against Amazon alleges that the company misled advertisers in its retail marketplace by charging them nearly their full bid in auctions that were supposedly second-price, extracting over $20 billion since 2019. The case covers Sponsored Products, Sponsored Brands, and Display ads, but not Prime Video or other DSP inventory. The article argues that Amazon's auction terminology is inconsistent across its DSP products, with different descriptions for Private Auctions and a lack of clarity on pricing mechanics. It highlights Amazon's own research on soft floors and payment rule visibility, and suggests that buyers should demand clear auction disclosures from all DSPs. The author recommends shifting spend toward direct, PMP, and PG deals to mitigate risks from opaque auction mechanics.
- •The FTC sued Amazon over an alleged secret ad surcharge scheme, claiming Amazon charged advertisers nearly their full bid 80% of the time in supposedly second-price auctions.
- •The FTC alleges Amazon extracted more than $20 billion from advertisers since 2019 through this practice.
- •The lawsuit covers Sponsored Products, Sponsored Brands, and Display ads, but not Prime Video, CTV, or streaming audio inventory.
