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The Federal Trade Commission (FTC)—a government agency that protects consumers from unfair business practices—has accused Amazon of using a hidden system to inflate what companies pay for ads on its platform. Here's how it works: when businesses bid to show ads on Amazon, the company sets a minimum price (called a "reserve price") that bids must meet. The FTC claims Amazon secretly raises this minimum to squeeze more money out of advertisers, making ads more expensive than they should be.
Amazon has pushed back hard, saying the accusation is unfair. However, the situation looks serious for Amazon because courts have recently sided with regulators in similar cases against Google, Amazon's rival in online advertising. Those rulings suggest judges may be increasingly skeptical of how tech giants run their ad systems.