Attorney General Brenna Bird Announces Lawsuit Against Amazon for Overcharging by Tens of Billions for Advertising
DES MOINES—Attorney General Brenna Bird announced today she has joined a bi-partisan lawsuit against Amazon for secretly and systematically overcharging small businesses for advertising on their platform since 2019. Based on internal documents describing its “hidden” “surcharges,” Amazon’s scheme has likely illegally extracted tens of billions of dollars from its advertising customers, including many small businesses who rely on Amazon.
Since 2019, Amazon has overcharged 1.2 million advertising customers by manipulating the “auctions” that it uses to set the price of ads on its platform. Amazon says, and advertisers believe, that competitive auctions set the prices for advertising on its leading e-commerce website. But Amazon overrides and replaces the actual auction results with higher prices set by Amazon to increase its profits. Amazon significantly inflated prices on peak shopping days.
Amazon’s scheme has resulted in substantial overcharges and cost increases paid by its approximately 1.2 million U.S. advertising customers, which includes small and medium-size businesses. In 2025, Iowa independent sellers on Amazon sold more than 14 million items on Amazon and the average sales per independent seller was $315,000.
Amazon actively conceals from customers the auction price inflation through extensive testing to assess the risk of detection. They add and fine-tune design features to its pricing system to help hide the surcharges from customers and respond to customer complaints about suspicious price increases by falsely denying that Amazon played any role in raising the prices. Through its testing process, Amazon has repeatedly confirmed that its advertising customers are unable to detect its scheme.
“One of the most profitable companies in the world is making money off the back of Iowa small businesses,” said Attorney General Bird. “And if a small business’s costs are going up, they will pass that on to the customer. So, Iowans who buy things from Amazon are also overpaying. Amazon hid this practice for years—now it’s time to hold them accountable.”
Attorney General Bird joins the attorneys general of Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington.
Read the complaint here.
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For More Information:
Contact: Jen Green | jen.green@ag.iowa.gov
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