Amazon rejects allegations of consumer harm
Amazon has strongly rejected a newly filed lawsuit by the Federal Trade Commission ( FTC ) and 22 state attorneys general, labeling the action misguided and refuting allegations that it misled marketers regarding the pricing dynamics of its Sponsored Ads auctions. Addressing the extensive investigation leading up to the legal challenge, Amazon stressed that after combing through approximately 1.5 million pages of documentation over six years, regulators relied on only a few simplified internal messages to claim there was an enterprise-wide effort to deceive partners, an accusation the company called completely untrue.
The e-commerce firm says that it works systematically to ensure its grocery and retail offerings match or undercut competing retailers across an expansive catalog. The retail and cloud giant’s response came after the regulatory agency alleged that Amazon deceived advertisers about its auction mechanics. Amazon countered that its business practices disprove any claim of injury to consumers While regulators have framed the lawsuit as a protection measure against inflated retail pricing.
Beyond baseline discounted pricing, Amazon says, customer accounts saved an average of more than $230 last year alone by taking advantage of promotional coupons, limited-time deals, and the Subscribe & Save subscription feature. It also pointed out that across more than 150 pages of legal filings, the FTC presented zero evidence of rising consumer prices, mentioning shoppers only a handful of times. Amazon argued that the FTC’s lawsuit misunderstands commercial advertising, noting that businesses alter their spending based on actual campaign outcomes rather than technical auction blueprints.
Because of our focus on relevancy, “In 2026, we estimate that advertisers will deliver at least 58% higher sales with this model—rather than being ranked by highest bid amount—and at least 46% better return on ad spend. Because we prioritize ad relevancy rather than simply the highest bid.,” the company said in its response, additionally, shoppers are 58% more likely to see ads for products they would consider clicking on or purchasing.
“Even accepting the FTC’s flawed premise that advertisers do not adjust bids, we estimate they saved over $8 billion from 2021 to 2025 as a result of Amazon prioritizing ad relevancy over selecting ads on bid price alone,” Amazon said, adding, “Average winning bids fell 50% from 2019 to 2025 on Sponsored Products search ads, and roughly 92% of placed ads are not given to the highest bid. The company explained that under the generalised second-price auction system, marketers never pay an amount exceeding their original bid. Furthermore, by ranking ads based on product relevance rather than raw monetary bids. Get the latest technology news and updates. Download the TOI App.