Consumers Affected
1,200,000
New York Attorney General Letitia James, joined by 21 other states and the FTC, sued Amazon for secretly overcharging its advertising customers more than $20 billion by submitting fake second-place bids to inflate ad auction prices since 2018. More than 1.2 million advertisers, including hundreds of thousands of small businesses, were allegedly overcharged. The coalition seeks a court order stopping the scheme plus penalties, restitution, and damages.
The lawsuit seeks a court order barring Amazon from continuing the illegal bidding scheme and requiring the company to pay civil penalties, restitution, and other damages to the states and federal government.
In-house legal teams that advertise on Amazon or rely on programmatic ad platforms should review their advertising services agreements, insertion orders, and media buying contracts for pricing transparency and auction integrity provisions. Key clauses include fee calculation and pricing methodology disclosures, audit rights over billing and auction data, representations regarding fair and non-deceptive pricing practices, and remedies for overbilling (credits, refunds, restitution). Companies negotiating ad platform terms should demand contractual guarantees that auction mechanics match described second-price models, access to auction data, and indemnification for regulatory penalties arising from the platform's pricing practices. Vendor and procurement teams should also assess whether inflated ad costs were passed into product pricing and whether existing contracts allow recovery of overcharges.
Entity
Amazon.com, Inc.
Industry
TechnologyOfficial Press Release
https://ag.ny.gov/press-release/2026/attorney-general-james-sues-amazon-fraudulently-overcharging-advertisers-more-20
federal trade commission et al v amazon.com inc complaint 20
https://ag.ny.gov/sites/default/files/court-filings/federal-trade-commission-et-al-v-amazon.com-inc-complaint-2026_0.pdf
New York Attorney General Enforcement Page
https://ag.ny.gov/press-releases
"suing Amazon for secretly overcharging its advertising customers more than $20 billion"
"August 31, 2026"
"joined a bipartisan coalition of 21 other states and the Federal Trade Commission (FTC)"
"more than 1.2 million advertisers, including hundreds of thousands of small and medium-sized businesses, were overcharged more than $20 billion"
"violations of the FTC Act banning unfair and deceptive business practices and false advertising"
"New York’s FAIR Business Practices Act"
Colorado Attorney General Phil Weiser joined the FTC and 22 state attorneys general in filing a lawsuit against Amazon for manipulating the auctions used to set advertising prices, replacing actual auction results with higher prices since 2019 and overcharging nearly 1.2 million U.S. advertising customers. The FTC estimates total improper surcharges from 2018 to 2026 exceed $20 billion, with costs ultimately passed to shoppers through higher prices. The states seek a permanent injunction and monetary relief; no penalty has been imposed yet as this is a newly filed complaint.
Texas Attorney General Ken Paxton sued Amazon.com, Inc. on August 31, 2026, alleging Amazon deceived advertisers by claiming to run second-price auctions while secretly applying hidden surcharges and undisclosed 'soft reserve' prices that pushed winners' costs up by roughly 17% on ordinary days and more than 25% during peak events like Prime Day. The hidden surcharges generated roughly $4.5 billion in additional nationwide revenue in 2024, and more than 18,000 Texas sellers and vendors advertise on the platform. The State brings claims under the Texas Deceptive Trade Practices Act, seeking civil penalties of up to $10,000 per violation, an injunction against inaccurate auction descriptions, and per-auction pricing records for every Texas advertiser; the FTC and a coalition of other states filed a parallel federal action the same day.
$1.0B
The FTC secured a $2.5 billion settlement with Amazon, including a $1 billion civil penalty and $1.5 billion in consumer refunds, for enrolling millions of consumers in Prime subscriptions without proper consent and designing a deliberately difficult cancellation process. The order requires Amazon to implement clear enrollment disclosures, an easy cancellation method, and cease the unlawful practices.
$25.0M
The FTC and DOJ charged Amazon with violating COPPA by indefinitely retaining children's Alexa voice recordings and failing to honor parents' deletion requests. Under a proposed consent decree, Amazon must pay $25 million, delete children's data, and implement privacy safeguards.
$8.0M
New York Attorney General Letitia James secured an $8 million settlement from VGW Holdings Pty. Ltd. and its affiliates for unlawfully operating online sweepstakes casinos — Chumba Casino, Global Poker, and Luckyland Slots — that allowed New Yorkers to play casino games with virtual coins exchangeable for cash or prizes. The OAG's June 2025 cease and desist letter stopped the company from offering virtual coin gambling in New York, and Governor Hochul signed a formal ban on sweepstakes casinos into law in December 2025. Under the settlement, VGW will pay $8 million in disgorgement, penalties, and costs; note this is an illegal-gambling enforcement action rather than a privacy matter, so no privacy violation taxonomy categories apply.
$824K
New York Attorney General Letitia James secured a settlement with 425 Marcy, LLC and its principal Ezra Unger over the unlawful pre-sale of condominium units at 427 Marcy Avenue in Williamsburg before the required Martin Act offering plan was accepted for filing, and the misuse of $6.715 million in buyer down payments that were never placed in escrow. Unger agreed to repay residential buyers their down payments with interest or provide purchase credits, pay up to $824,000 in penalties, and is barred from selling securities in New York for six years. Note: this is a real estate offering-plan/escrow enforcement action rather than a data privacy matter; 'notice_failure' is the closest available taxonomy mapping (selling without the required offering plan disclosures).