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Up to 250 percent markup on auction revenue on major shopping days: With this figure, the US competition authority FTC is tightening its lawsuit against Amazon Ads. On 6 November 2026 it released previously redacted passages describing how, according to the authority, Amazon allegedly raised click prices for Sponsored Products without transparent information to advertisers.
The auction that buyers thought was a different one
At the core is a difference between the expected auction price and the click price actually charged. For years Amazon described its search ads to advertisers as a variant of a second-price auction: the winner always pays only the amount needed to beat the next-highest bidder.
After the now partially unredacted FTC complaint Amazon additionally deployed a mechanism internally called the "Soft Reserve Price". The agency speaks of hidden price markups of up to 50 percent on normal days and up to 250 percent around Prime Day or Black Friday.
The lawsuit originally dates from August. What is new are the disclosed internal statements and more specific figures from the files. The FTC and 22 US states accuse Amazon of concealing the practice for years. Amazon denies the allegations and considers the use of such reserve prices lawful; the case is ongoing.
The new figures hit peak season
The FTC now quantifies the effects for individual periods more precisely. During the holiday season 2,021, average click prices allegedly rose by around 20 percent as a result of the mechanisms in question, and by more than 200 percent for some advertisers. For the holiday season 2,022 the authority cites 87 million dollars in additional revenue that Amazon allegedly earned through the markups.
In internal documents cited by the FTC, employees already complained that higher prices worsened advertisers' return on ad spend. According to the complaint, one advertiser even explicitly asked whether the auction mechanics had changed. The answer from account management attributed the price increase to stronger competition.
For sellers, that is exactly the crux: when CPCs rise, they have to decide whether competition, conversion rate, product prices or the ad auction is responsible. Pricing logic that is hard to verify makes that decision harder.
Meanwhile Amazon expands AI automation
The topic gains additional relevance from Amazon's new agentic advertising offering. The company is expanding its tools so that targeting, budgets and creative optimisation are increasingly steered by AI. Srocket has already covered the debate about the Amazon Ads Agent and its black-box risks. The FTC allegations relate to the older Sponsored Products auctions, not to the new AI agents.
The economic backdrop is large: in the third quarter 2026 Amazon reported roughly 19,6 billion dollars in advertising revenue, according to its quarterly figures. Srocket's analysis of Amazon Ads, AI shopping agents and the Q3 revenue provides context for the growing business.
The principle extends well beyond Amazon: when platforms control the auction on one side and offer automated bidding decisions on the other, independent reporting becomes increasingly important. The article on DSP fees at smaller agencies shows what additional costs can arise in complex buying chains.
What advertisers can take away from the case
For retailers and agencies, a clear review process before the Black Friday season is worthwhile: analyse click prices and conversion rates across comparison periods, document bid changes, and do not explain rising costs by seasonal competition alone. Looking at your own contribution margins and the new-customer revenue actually generated helps more than viewing a CPC trend in isolation.
Whether the FTC can prove its allegations in court is for the court to decide. However, the files now published make clear why the calculated auction price itself has become a central question of trust in the digital advertising business.
Image: Marques Thomas / Unsplash.