Arizona Joins FTC to Sue Amazon Over Alleged Consumer Fraud

Attorney General Kris Mayes is joining the Federal Trade Commission and 21 other states to sue Amazon for allegedly artificially inflating the prices of advertisements sold on its e-commerce platforms. The group says Amazon imposed “undisclosed” surcharges on customers looking to advertise — including more than 500,000 small businesses — over the last seven years. 

“Amazon has built one of the largest advertising businesses in the world on the backs of small business owners who trusted the company to play by its own rules,” said Mayes in an official statement. 

The root of the issue, according to the plaintiffs, is Amazon’s practice of anonymous “second-price” auctions for advertisements, where businesses place bids for ad space that customers could see. Because the company kept bidding anonymous, the coalition asserts that Amazon was filling the gaps between the highest and lowest bidders with undisclosed charges. 

According to Mayes’ official statement, concerns were first raised after an internal memo in 2023 described the practice as not “doing the right thing for advertisers.” 

“For years, Amazon told advertisers they were bidding in a fair, second-price auction, while secretly adding hidden surcharges that drove prices higher. Many of these increased costs were passed on to Arizonans. Companies that engage in such deceptive practices must be held accountable,” Mayes said. 

Mayes, in alleging a violation of Arizona’s Consumer Fraud Act, has asked for a change of practices, a fine, civil penalties and attorneys’ fees for each violation.  The attorneys general of 20 other states have joined the FTC’s complaint .

“When one of the world’s largest online retailers engages in unfair and deceptive conduct, the impact can be staggering,” said FTC Chairman Andrew N. Ferguson in an official 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. The FTC under President Trump won’t allow this deception to continue.”

The lawsuit against the tech company  joins a multitude of other claims filed by Mayes in the same vein. In August, she announced a $17.1 billion settlement earned against Meta Platforms over Instagram’s intentionally addictive design features. The settlement was a major victory for Mayes, with Meta promising to implement a “sweeping” set of safety features designed to protect children in the fallout.