What the FTC is alleging
Bloomberg broke the story on June 16: the FTC has drafted a complaint against Amazon's advertising business. The allegation is specific — Amazon failed to disclose reserve pricing in its Sponsored Products and Sponsored Brands auctions.
Reserve pricing is the minimum bid a platform sets before an ad placement can be won. The complaint's core claim is that Amazon had one, didn't tell advertisers about it, and let brands bid against an invisible floor rather than actual competitors.
Amazon's ad business generated $68.6 billion last year. Multiple state attorneys general are involved alongside the FTC, with state consumer-protection law allowing penalties of tens of thousands of dollars per violation, per day. At the scale of Amazon's ad volume, "billions" is not an exaggeration. The FTC may resolve this via lawsuit or settlement as soon as this summer.
What reserve pricing actually does to your bids
In a transparent auction, you're competing against other sellers. You win by having the highest bid at the lowest efficient price. That's the mechanism Amazon markets to its advertisers.
If a hidden reserve exists, the mechanism works differently. You bid $0.80. Amazon's floor is $1.20. Your ad doesn't serve — not because someone outbid you, but because you didn't clear a threshold you didn't know existed. You raise your bid to $1.10. Still nothing. You raise it to $1.30. Now you're winning impressions — but you've crossed into the range Amazon needed you to reach, not the range competitive market dynamics required.
The result: CPCs that climb faster than competitive pressure actually explains, because you're bidding against a wall Amazon placed behind the auction. You can't diagnose this from inside the Amazon Ads interface. The floor isn't surfaced in any report.
Why Prime Day makes this more relevant right now
Prime Day 2026 ran June 23–26 — the first time the event has been held in June rather than July. CPCs on sponsored placements spiked across categories during those four days. Brands that ran heavy Prime Day campaigns were paying elevated prices in exactly the high-volume auction environment where a hidden reserve would have its largest dollar impact.
If your Prime Day CPCs felt unusually high and you couldn't explain why from competitive data alone, you weren't misreading the numbers. You just had no mechanism to separate real competitive pressure from a platform floor.
What to do before the investigation resolves
The investigation is active. Amazon won't change its auction mechanics mid-proceeding, and any enforcement will come through an official outcome. That limits immediate options. But four things are worth doing now.
Pull your Sponsored Products average CPC by category for the past 24 months. If you see CPC inflation that outpaces your category's competitive intensity — without obvious new entrants or clearly escalating competition — that gap is worth documenting.
Stop reactive bid increases. If impression share is low and you keep raising bids to fix it, you may be clearing a floor rather than outbidding a competitor. Hold steady until there's more transparency on how the auction actually works.
Export your current CPC and impression data at campaign and account level. If the FTC action leads to retroactive remedies, advertisers with documented baseline data will have something to work from.
Build redundancy in your retail media mix. Amazon's advertising product works — $68.6 billion in annual revenue reflects real advertiser results. But a platform under active investigation for pricing opacity is one where your cost-per-result assumptions could be structurally off. Walmart Connect, Instacart, and Target Roundel are worth putting meaningful test budgets against if you haven't already.
If you're unsure how Amazon fits in your broader paid channel mix, the free audit at Gromerce maps your current allocation and shows where CPC efficiency is most likely breaking down.
The FTC complaint isn't about whether Amazon's ads deliver results. It's about whether the price you paid for those results was ever disclosed accurately.
Sources: Bloomberg, Gizmodo, The Next Web, Seeking Alpha, FTC, June 2026
