FTC and 22 states sue Amazon over alleged secret ad surcharge scheme

The Federal Trade Commission and 22 states on Monday sued Amazon over allegations that the e-commerce giant secretly inflated prices in its online search advertising auctions, potentially costing customers tens of billions of dollars.

The lawsuit alleges that the undisclosed surcharges were applied for seven years, increasing the prices that more than 1 million Amazon brands and sellers were required to pay to advertise on its platform.

The FTC's lawsuit was joined by the attorneys general of Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont and Washington.

"When one of the world's largest online retailers engages in unfair and deceptive conduct, the impact can be staggering," FTC Chairman Andrew N. Ferguson said in a statement. "Amazon has millions of advertising customers who were misled into paying significantly higher prices. These higher costs were largely passed on to American consumers."