FTC says Amazon raised ad prices up to 250% on peak days

The complaint says the extra charges came from undisclosed reserve prices (hidden settings that can raise the final cost per click) on Sponsored Products, Amazon’s search ads, which moved what advertisers paid closer to their own maximum bids. It puts the gain at an additional $87 million in the 2022 holiday season and says executives discussed finding $40 million more in 2023 to meet targets. Amazon rejects the FTC’s interpretation, arguing that a reserve price matches the value of the ad slot.

Digiday’s briefing of 10 November sets the case beside Amazon Ads Agent, the AI system Amazon unveiled at its unBoxed conference in October: the advertiser sets budget, creative, products and goals, and Amazon’s technology decides targeting, budget allocation and optimisation. In its own beta figures, Amazon reports up to 67% higher long-term return on ad spend than campaigns set up by hand. Digiday notes the FTC’s allegations concern the Sponsored Products auctions; they make no claim about the new AI products.

Our price sheet, checked on 10 November, lists Amazon’s creative AI (Video Generator, image and audio tools, Creative Agent) as included with an Amazon Ads account at no extra charge. Our Amazon ads tools page compares it with paid tools.

Amazon’s AI creative adds nothing to an advertiser’s bill, so what a campaign costs sits in the auction price, the part the FTC says Amazon raised without telling buyers.