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California Attorney General Rob Bonta has added California to the list of states suing Amazon, alleging that the online retail giant overcharged businesses using the platform to advertise their products.
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The Federal Trade Commission is also part of the suit against Amazon. According to Bonta, the e-commerce giant has “secretly, systematically, and illegally” acquired an estimated $20 billion dollars from 1.2 million customers paying for advertisements on the Amazon website and app. Bonta made his remarks during a Monday afternoon press conference.
The other states joining the suit are Alaska, Arizona, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington.
“It’s striking that this is a bipartisan lawsuit and a partnership with the federal government,” Bonta said. “That doesn’t happen all too often these days.”
The lawsuit, said Bonta, hinges on Amazon’s use of second-price auctions to sell ad space. In second-price auctions, buyers compete to purchase space and the winning bidder will pay a small amount more than the second-place bidder. “It’s meant to be a free, fair, and competitive system, but that’s not what Amazon is running,” said Bonta.
Instead, Bonta and the other attorneys general allege that Amazon places a surcharge on top of the second bid amount, therefore driving up what the first bidder ends up paying without informing either party. “Amazon never notified customers when it started adding surcharges to the final price,” said Bonta.
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He also stated that Amazon employees have admitted internally that the company has hidden details of this process for fear of causing “irrevocable damage to advertiser trust.”
“By misrepresenting how it calculates ad costs and concealing the truth, Amazon has violated multiple federal and state laws, including California’s False Advertising Law and our state’s Unfair Competition Law,” Bonta said. “We’re taking the company to court to deliver justice.”
In 2025, Amazon made $68 billion dollars in ad revenue, and the company is one of the world’s largest digital advertisers. In the Aug. 31 press conference, Bonta said that Amazon not only “substantially” overcharged business owners, but that the result was harming “everyday Amazon shoppers” by passing on the costs to consumers.
Amazon responded to the lawsuit in a blog post on Monday, stating that the FTC complaint provided no evidence of costs being passed on to customers and that the lawsuit doesn’t take into account the realities on online ad sales. “They have shown little interest in engaging with the facts and appear more focused on trying to secure a substantial monetary victory for themselves and states they can lure with this possibility,” read the statement.
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