AINEWS
Amazon May Have Made Advertisers Bid Against Nobody
The FTC is reportedly preparing a case over alleged hidden minimum prices in Amazon's ad auctions, a mechanism that could have quietly cost advertisers across a $68 billion business.
The FTC is reportedly preparing a case over alleged hidden minimum prices in Amazon's ad auctions, a mechanism that could have quietly cost advertisers across a $68 billion business.
The Federal Trade Commission is reportedly preparing legal action against Amazon over its advertising business, with the focus on whether the company hid the minimum prices it set in the auctions that decide which sponsored products appear in its marketplace, according to Bloomberg sources cited by Gizmodo.
The mechanism at issue is what ad buyers call a reserve price, a floor the seller sets on an auction and the lowest amount they will accept. In a standard auction, that floor is known to the bidders. In Amazon's case, the company itself runs the auction for ad placement inside product search results, and the alleged concern, per the Bloomberg reporting summarized by Gizmodo, is that it kept that floor hidden from the advertisers who were bidding. An advertiser who believed they had just outbid a rival may, in practice, have simply met an Amazon-set minimum, with no competing bidder actually in the auction at all.
The distinction matters because Amazon's ad business is not a flat fee or a published rate card. In 2025, it generated $68 billion in revenue, according to Amazon figures cited in the same Gizmodo report, with each placement priced in real time by automated bidding systems that assume the final number reflects what a competitor was willing to pay. If the floor was undisclosed, the competitive signal those systems were responding to was at least partly fictional, and the prices advertisers converged on were higher than the market would have cleared at.
The FTC's interest, as reported, follows an earlier 2025 Bloomberg report that described the agency scrutinizing both Amazon and Google over similar questions about reserve prices and disclosure in their ad auctions. That earlier reporting suggests the current potential action is the next step in a multiyear trajectory rather than a sudden pivot, though no filing has been confirmed and the FTC has not publicly named Amazon as a target.
Advertisers and the platforms they buy from have long complained that Amazon's own brand and product listings crowd its search results, pushing sellers toward paying for sponsored placement just to be seen. The reserve-price allegation sits inside that broader pattern. If a seller cannot win organic visibility and then learns that even the paid option was structured around a hidden minimum, the auction that produced the price looks less like a market and more like a toll booth with a moving gate.
The harm, as the reporting frames it, is per advertiser and per auction rather than at the level of total corporate revenue. A small brand bidding on a single keyword for a single afternoon might overpay by a few dollars and never know it. Multiply that across billions of sponsored placements in a year, and the gap between what advertisers paid and what a transparent auction would have produced becomes a meaningful share of that $68 billion.
Two things to watch. First, whether the FTC actually files a case, or whether the action takes the form of a consent decree, a formal inquiry, or a settlement that does not require admitting the conduct alleged in the reporting. Second, whether Amazon changes the disclosure rules inside its auction tools before any action lands, since a self-imposed change would limit both the legal exposure and the ability of any case to show ongoing harm.
For now, the reporting is at the preparation stage, not the filing stage, and Amazon has not been named in a public FTC complaint. The story is that one of the largest advertising markets in the world may have been running on a price signal its buyers were not allowed to see.