FTC vs. Amazon: hidden overpricing in ads and impact on retailers

The context: what triggered the FTC lawsuit against Amazon

On August 31, 2026, the Federal Trade Commission filed a new lawsuit against Amazon. The accusation, supported by 22 US states, is that it has applied a surcharge advertising not disclosed to third-party sellers. Essentially, Amazon allegedly inflated ad costs without transparently communicating it to advertisers. The news is reported in detail by TechCrunch .

This isn't the first clash between the FTC and the Seattle giant. However, this lawsuit stands out for the specificity of its subject: not data management or broad antitrust practices, but the fee structure of the advertising system. Therefore, the potential impact directly affects those who invest in Amazon Ads.

For Italian marketing managers, the issue is not abstract. Many SMEs and mid-market retailers allocate a significant portion of their digital budget to Amazon. Consequently, understanding what's happening is essential for making informed decisions.

The numbers that matter: Amazon Ads in the retail landscape

Amazon has become the third largest digital advertising platform in the world. According to industry data , Amazon's advertising segment has surpassed $50 billion in annual revenue. In Italy, the share of retailers using Amazon as their primary sales channel — and therefore for advertising — has grown steadily in recent years.

Furthermore, Amazon Ads' model is based on automated auctions and optimization algorithms. This makes it difficult for the average advertiser to independently verify if the cost paid corresponds to the actual auction value. Thus, a structure of surcharge hidden, if confirmed, it would be structurally invisible without specific audits.

Also, it is worth remembering that the FTC has already investigated the practices of self-preferencing of Amazon in organic results. This new lawsuit expands the scope of regulatory control to the ads system. In particular, the issue of algorithmic transparency is at the center of the regulatory debate both in the USA and Europe, as highlighted by the European Digital Markets Act .

Strategic read: what this means for those managing budgets on third-party platforms

The Amazon-FTC affair raises a broader issue. Whoever entrusts their advertising spend to a single closed platform implicitly accepts a level of opacity. However, this risk is often underestimated in media planning.

In fact, the systems of programmatic advertising and proprietary platforms — from Amazon to Meta, to Google — operate with auction logic that the advertiser cannot fully verify. As a result, the effective cost per acquisition can deviate significantly from what is expected. This is a topic that we at SHM Studio we systematically tackle with clients during the campaign audit phase.

Furthermore, the risk is not just economic. Excessive dependence on a single platform exposes the brand to regulatory volatility, sudden algorithmic changes, and, as in the Amazon case, potential cost reclassifications following regulatory investigations. Therefore, diversifying the media mix is not just good practice: it's a resilience measure.

Focusing on a single platform amplifies both the highs and the risks.

The European regulatory pipeline: what changes for Italian retailers

The American lawsuit also has direct implications for the European context. The Digital Markets Act, which came into force in 2024, requires gatekeeper — including Amazon — transparency obligations on advertising practices. Therefore, a potential conviction in the USA could accelerate similar investigations by the European Commission.

Furthermore, the Italian Competition Authority (AGCM) has already initiated proceedings against Amazon in the past for unfair commercial practices. Consequently, the regulatory framework for Italian retailers operating on Amazon could evolve rapidly in the next 12-18 months.

For marketing managers, this means one concrete thing: it's the right time to review contracts with platforms, analyze spending reports with greater granularity, and assess whether the level of transparency received is adequate. In particular, it is advisable to request detailed cost breakdowns by placement type and compare them with market benchmarks.

Operational implications: how to shift your budget allocation

This news should not cause impulsive reactions. Abandoning Amazon Ads overnight is not a sensible strategy for those who rely on the platform for a significant portion of their sales. However, it is time to start a structured review.

Below are some practical actions that marketing teams can kick off right away.

• Amazon Ads spend audit: analyze cost reports per campaign, compare actual CPC with category benchmarks, and verify consistency between declared spending and recorded conversions.
• Media mix diversification: consider boosting your share on alternative channels, like Google Ads and LinkedIn Ads , depending on the target and sector.
• Investment in owned channels: strengthening presence on proprietary assets — website, SEO, email marketing — reduces dependence on third-party platforms. In this sense, a strategy SEO solid is a long-term asset.
• Regulatory monitoring: follow the evolution of the FTC proceedings and any European investigations to anticipate changes in platform contractual conditions.

Besides this, it is smart to consider adopting tools for AI applied to marketing for automated performance monitoring and identification of anomalies in advertising costs. Similarly, a data-driven approach to digital marketing strategy makes it easier to spot signs of wasted spend faster.

What nobody is saying: the problem with algorithmic trust

There's an aspect that rarely emerges in industry analyses. Most advertisers accept the platforms' logic without verifying it. This isn't a technical competence issue: it's a structural problem of information asymmetry.

Advertising platforms are closed systems. The advertiser sees the results, but not the mechanism. Consequently, any surcharges or algorithmic inefficiencies remain invisible until they emerge in legal proceedings — as in the Amazon case. Therefore, algorithmic trust cannot be blind: it must be periodically verified with independent audits.

In this regard, we at SHM Studio we recommend clients adopt a quarterly campaign review cadence, with particular attention to the consistency between declared investment and measurable results. A structured approach to digital marketing management always includes this control component.

Finally, it's useful to remember that transparency isn't just an ethical issue. It's a competitive advantage. Those who truly understand where their advertising budgets are going can optimize more effectively and react more quickly to market changes. To delve deeper into these topics, the team at SHM Studio is available for a consultation . Further resources and analysis are available in our Blog .

Outlook: what to expect in 2027

The FTC proceedings will take a long time. However, the regulatory impact could be faster. In Europe, the Commission could launch parallel investigations by the end of 2026. Furthermore, other industry players — Meta, Google — could be subject to similar scrutiny regarding advertising cost transparency.

For Italian retailers, 2027 looks like a year of transition. The rules of the game on ad platforms could change significantly. Consequently, those who start building a more balanced media mix today — with a component SEO and content solid, diversified campaigns, and owned assets — will be in a stronger position. Similarly, investing in a deep understanding of one's marketing data is a priority that cannot be postponed. For a complete overview of digital services available, the starting point is always an analysis of the specific context.