Key Stats for Amazon Stock
- Price change for Amazon stock in the last 6 months: 25%
- $AMZN Stock Price as of Aug. 31: $260
- 52-Week High: $287
- $AMZN Stock Price Target: $328
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What Happened?
Amazon (AMZN) stock is back under legal scrutiny after the Federal Trade Commission sued the company Monday, alleging it “secretly and systematically overcharged” advertisers on its platform.
The lawsuit, filed in U.S. District Court for the Western District of Washington, claims Amazon may have pulled in more than $20 billion from advertisers through hidden surcharges dating back to 2019.
According to the complaint, Amazon used to run a “second-price” auction system, telling advertisers they’d only pay the minimum bid needed to win.
The FTC alleges Amazon quietly changed those rules in 2019 by adding an undisclosed “soft reserve price” that pushed ad costs higher, without telling advertisers.
The agency even cites internal communications where a company executive allegedly referenced using an “invented auction participant” to raise prices.
FTC Chairman Andrew Ferguson said millions of advertisers were misled into paying more, and that “these higher costs were largely passed on to American consumers.”
Amazon pushed back hard.
In a blog post, the company called the lawsuit “misguided” and said it misunderstands how advertisers actually operate.
Amazon also said its auction systems saved advertisers $8 billion between 2021 and 2025, contrary to the FTC’s claims. The company said it plans to fight the case in court.
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What the Market Is Telling Us About Amazon Stock
This lawsuit lands at a sensitive moment for Amazon’s ad business, which has become a major growth engine.
In Q2, Amazon Ads brought in $19.8 billion in revenue, up 26% year-over-year, with sponsored products ads driving much of that growth.
For the full year 2025, Amazon’s ad business pulled in more than $68 billion, making it the third-largest digital advertiser globally behind only Google and Meta.
Third-party sellers have already been vocal about rising advertising costs on the platform. Recent policy changes led some top merchants to boycott ad spending altogether, so this lawsuit adds fuel to concerns that were already simmering among Amazon’s seller base.
This isn’t Amazon’s first brush with the FTC either.
Last September, the company agreed to a $2.5 billion settlement over a separate investigation into its Prime membership program.
Amazon is also set to head to trial next year in a broader antitrust case brought by the FTC and 17 states, which accuses the company of using monopoly power to inflate prices and hurt third-party sellers.
Amazon has also denied wrongdoing in that case.
For investors watching Amazon stock, the ad business has been a key profit driver alongside AWS, so any disruption to that segment carries real weight.
Whether this lawsuit changes how advertisers approach Amazon’s platform, or simply becomes another prolonged legal battle, will likely shape sentiment around Amazon stock in the months ahead as the case moves through the courts.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
