SAN FRANCISCO, United States (AFP) — The United States (US) Federal Trade Commission (FTC) and 22 states sued Amazon on Monday for allegedly “manipulating” online auctions for digital advertising, resulting in more than $20 billion in overcharges for 1.2 million customers.

Amazon “has secretly and systematically overcharged its approximately 1.2 million advertising customers by manipulating the ‘auctions’ that it uses to set the price of ads on its platform,” says the complaint, filed in federal court in Washington state.

In a blog post, Amazon called the lawsuit “misguided” and “flawed,” and said that regulators “cherry-picked” outdated internal documents.

California Attorney General Rob Bonta told reporters on Monday that Amazon “has rigged billions of ad auctions.”

This is a bipartisan effort which “doesn’t happen all too often these days,” Bonta said.

California is one of the states suing alongside the FTC.

The complaint cites three separate advertising products at issue: Sponsored Products, Sponsored Brands and Sponsored Display.

“Based on numerous internal documents describing its ‘hidden’ ‘surcharges,’ Amazon’s scheme has likely illegally extracted over 20 billion dollars from its unwitting advertising customers,” the complaint says.

The filing alleges that in 2018 “Amazon began secretly manipulating its auction results to increase its ad prices” and “gave its customers no notice of this change and took affirmative steps to conceal it.”

This is the third major lawsuit filed against Amazon by the FTC.

In September 2025, Amazon agreed to pay $2.5 billion to settle allegations that it used deceptive practices to enrol consumers in Amazon Prime and made it difficult to cancel subscriptions.

And early next year, a trial is scheduled to begin in a case that accuses Amazon of illegally maintaining a monopoly in online retail.