The playbook regulators used against Google’s ad stack is now being tested against Amazon’s. The FTC and 22 state attorneys general sued Amazon on August 31, alleging the company spent roughly seven years padding its ad auction with an undisclosed surcharge it called internally a “soft reserve price.” The complaint alleges Amazon marketed its auctions as competitive “second price” mechanics while charging advertisers their full bid on Sponsored Products roughly 80 percent of the time by 2024, up from 30 to 40 percent in 2021, concealed from more than a million brands, including over 500,000 small and medium-sized businesses. FTC Chairman Andrew Ferguson said in the agency’s announcement that “when one of the world’s largest online retailers engages in unfair and deceptive conduct, the impact can be staggering.”
Why it matters: the case lands two weeks after a federal judge ordered behavioral, not structural, remedies in the government’s separate ad tech case against Google, and trade press is already reading the Amazon suit through that outcome. The lesson being drawn is that a monopolist can be forced to change specific practices without a breakup of the business built on them, and the Amazon complaint, targeting one hidden pricing mechanism rather than the ad stack as a whole, looks built for exactly that kind of fix.
The original insight is in what remedy would actually close the gap the FTC describes. A behavioral order banning the soft reserve mechanism does not change Amazon’s underlying incentive to extract more auction revenue from advertisers with no comparable alternative for reaching its shopper base; it only removes the lever that got caught. Marketing and revenue leaders buying Sponsored Products inventory should read this less as a signal pricing gets fairer and more as a signal that auction transparency, not structure, is about to become the thing every DSP and retail media network gets asked to prove.
For this pub’s related coverage of the Google case the Amazon suit is being measured against, see Ad Tech’s Remedies Arrive, but the Rulebook Is Sealed and Ad Auction Integrity Just Became a Federal Case.
Source: Federal Trade Commission
