Money Stuff: The Podcast · Friday, September 4, 2026
The Federal Trade Commission, along with 22 state attorneys general, has filed a complaint against Amazon, alleging deception in its sponsored product ad auctions. The FTC claims Amazon misrepresented its auction system as a second-price auction, when in reality, it often uses a 'soft reserve' price that leads to winning bidders paying their own bid, not the second-highest bid.
“The Federal Trade Commission and 22 state attorneys general brought a complaint against Amazon claiming that it deceived advertisers in how it ran its auctions for like sponsored products.”
“And basically like the FTC's contention is that they say they run a second price auction where like the highest bidder in the auction gets the ad spot, but it pays the price that was bid by the second highest bidder.”
“And the FTC says that's actually not true. And it's like 80% of cases, the winning bidder gets the, um, quote, soft reserve.”