The FTC and 22 states are suing Amazon over advertising practices

The Federal Trade Commission and 22 states sued Amazon on Monday, alleging the e-commerce giant secretly raised the price of advertising on its website for millions of businesses.

In a lawsuit filed in federal court in Washington, Amazon’s home state, the FTC and states said Amazon inflated the costs brands and marketplace sellers had to pay to promote their products to consumers, including prominent “Sponsored Product” ads that appear in search results on widely used Amazon websites.

“Amazon has millions of advertising customers who have been misled into paying significantly higher prices,” FTC Chairman Andrew N. Ferguson said in a statement. “These higher costs have largely been passed on to American consumers.”

Amazon disputed the allegations in a blog post. The company said the FTC’s claims “fundamentally misunderstand how advertisers operate.” Amazon said its mechanisms resulted in more relevant ads that created better value for brands and sellers, and that the lawsuit “complaint does not provide any evidence of consumer price increases.”

This is a developing story. Check back for updates.