California Attorney General Rob Bonta joined the Federal Trade Commission and 22 state attorneys general in filing a lawsuit against Amazon over allegedly deceptive digital advertising practices.
The lawsuit, filed in U.S. District Court for the Western District of Washington, alleges that Amazon overcharged businesses advertising on its platform by adding hidden surcharges that were not disclosed to customers. Amazon obtained over $20 billion in undisclosed surcharges from advertising customers, according to the complaint.
The lawsuit states that Amazon told advertisers that prices in its advertising auctions were set by "second price" auctions where winning bidders pay only the minimum amount needed to beat the second-place bid. However, starting in 2019, Amazon allegedly added surcharges on top of the second-place bid, raising the final price without disclosing the change.
Amazon generates more than $68 billion in annual advertising revenue, primarily by selling advertising space on its e-commerce website and app. More than one million advertisers purchase advertising on the platform.
The attorneys general and FTC are seeking injunctive relief, civil penalties, disgorgement of ill-gotten profits and restitution.