On 31 August 2026, the FTC and 22 state attorneys general filed a complaint against Amazon, accusing it of quietly turning its “second-price” advertising auction into a first-price auction through an undisclosed internal reserve price that allegedly inflated the prices paid by advertisers since 2019 (official press release). More than a million advertisers buy this space without being able to check for themselves how their bid turns into an invoice.
The facts
- The complaint was filed on 31 August 2026 in the federal court for the Western District of Washington; it targets the auctions for Sponsored Products, Sponsored Brands and Display Ads, bought by more than a million brands and sellers, including more than 500,000 SMEs, for an estimated harm of tens of billions of dollars.
- According to the complaint, Amazon promised a “second-price” auction, in which the winner pays one cent more than the next bid, but added without notice, in 2019, a surcharge known internally as the “soft reserve price”: the share of Sponsored Products advertisers billed at their maximum bid rose from 30 to 40% in 2021 to 70% in 2022, then to around 80% in 2024. The internal documents cited refer to an “invented auction participant” and a proxy second price calculated by Amazon.
- Amazon immediately rejected what it called a misguided complaint, stating that the average cost per click of Sponsored Products remained stable, adjusted for inflation, between 2019 and 2024, that the conversion rate rose by 24% between 2021 and 2025 and that around 92% of Sponsored Products placements are not awarded to the highest bid (official response).
What does this case change for advertisers buying retail media?
Amazon's guilt remains to be established in court. The case nevertheless reveals something more certain than the verdict to come: no advertiser can currently check for itself how its bid becomes an invoice. The advertiser sets a ceiling, the platform calculates a price, and that calculation remains invisible from the outside.
The other retail media networks, from Walmart Connect to Instacart or Carrefour Links, rest on the same principle: a closed auction, run by the platform that sells the space, with no obligation of transparency on the calculation mechanism. Retail media framework contracts rarely impose an audit clause on that mechanism; they settle for result indicators, CPC or ROAS, produced by the platform itself and rarely recalculated independently.
This case differs from the antitrust case against Google over the open programmatic chain, which concerns a monopoly position. The accusation here targets a gap between the auction mechanism promised to advertisers and the one actually implemented internally. A media buyer therefore has good reason to adopt one criterion: the contractual verifiability of the mechanism, ahead of the size of the platform that runs it.
AIxH's view
There is no need to know the outcome of the case to act. A marketing department can demand, right now, an audit clause on the auction mechanism in every retail media framework contract, before the next budget renewal. Our digital marketing agency in Luxembourg includes this contractual check in the digital maturity audits of our AI audit in Luxembourg service: review of the clauses, independent recalculation of the indicators supplied by the platforms, and budget-by-budget arbitration. We can go through the clauses of your current retail media contracts with you before you commit the next budget.