The FTC's investigation into Amazon's advertising practices could result in fines amounting to billions.

      Amazon's advertising division has quietly become a substantial source of revenue, but it could also lead to significant regulatory challenges.

      According to a Bloomberg report on June 16, the U.S. Federal Trade Commission (FTC) has prepared a potential complaint accusing Amazon of deceiving advertisers, which could result in billions in civil fines, based on information from sources familiar with the issue. However, no formal complaint has been filed yet. Both the FTC and Amazon have chosen not to comment, and since the report relies on anonymous sources, it should be interpreted as an indication of the regulator's intentions rather than a confirmed action.

      The focus of the FTC's investigation is whether Amazon appropriately discloses the terms and pricing of its advertisements, particularly the 'sponsored listings' that appear at the top of search results for products.

      The main concern involves 'reserve pricing,' which represents the minimum price that advertisers must surpass to secure an advertisement slot. If these minimums are not made transparent, an advertiser who is unaware may increase their bid without realizing they are competing against an invisible benchmark that only Amazon is privy to. This technical issue ultimately leads to increased advertising spending on Amazon's platform. The FTC is also scrutinizing Google for similar auction-related issues.

      The real danger comes from the involvement of state attorneys general. While the FTC's authority to impose financial penalties is restricted, Bloomberg suggests that multiple state attorneys general are engaged in the investigation. State consumer protection laws can impose fines of tens of thousands of dollars for each violation per day. Given the vast number of ads Amazon runs, these fines can accumulate rapidly, hence the projection of 'billions' in potential liabilities.

      The agency may resolve this issue by lawsuit or settlement as early as this summer, contingent on a vote from its two Republican commissioners, Andrew Ferguson and Mark Meador.

      The spotlight on Amazon is not coincidental. In 2025, the company's advertising revenue reached $68.6 billion, establishing it as the third-largest online ad seller after Google and marking it as one of its fastest-growing business segments.

      This situation also involves a company that the FTC has been investigating since at least 2019. Last fall, Amazon settled claims regarding misleading Prime subscription practices for $2.5 billion, and a separate antitrust trial alleging the company pressured brands to raise prices at competing retailers is scheduled for early 2027.

      Adding an advertising case would create a third significant challenge for Amazon. At present, it exists only as a drafted complaint supported by an anonymous report, but it directly targets a business area that Amazon can least afford to have disrupted.