FTC Investigation Into Amazon Ads: What Sellers Need to Know About Reserve Pricing & Auction Transparency

Sep 15

The FTC is investigating Amazon’s hidden reserve pricing in ad auctions — here’s what that means for your bids, your budget, and your brand strategy.

Why the FTC Is Targeting Amazon Advertising Practices
What Amazon Sellers Need to Watch For
How to Navigate This New Era of Amazon Advertising
Amazon Ad Management Options: Pros, Cons & Use Cases
Match Your Automation Strategy to Your Amazon Ad Spend
Final Word: Transparent Auctions = Smarter Scaling

If you've ever questioned whether your Amazon ad dollars are being spent fairly… you're not alone.

The U.S. Federal Trade Commission (FTC) is now investigating Amazon and Google’s advertising practices, and the outcome could reshape how ad auctions work — especially on Amazon.

At the center of the Amazon probe? Reserve pricing in Amazon ad auctions. The FTC is digging into whether Amazon has been transparent about minimum bid thresholds — and whether that lack of clarity misled advertisers.

This is more than a regulatory footnote. It could directly impact how your Amazon Sponsored Products and Sponsored Brands perform, and how much you’re paying for every click.

If you're a brand spending $10K–$500K/month on Amazon, here’s why this matters — and how to protect your ad strategy.

Why the FTC Is Targeting Amazon Advertising Practices

The FTC is zeroing in on ad auction transparency on Amazon, specifically:

1. What Is Reserve Pricing in Amazon Ads?

Reserve pricing refers to Amazon’s internal “floor bid” — a minimum CPC that must be met for your ad to enter the auction. This pricing isn’t always visible to advertisers.

You might be:

Bidding competitively, but losing placements because you didn’t hit the floor.
Overbidding unknowingly, because the auction rules are unclear.
Making optimization decisions based on incomplete or misleading data.

The FTC is asking: Did Amazon advertisers have the right information to make fair decisions? If not, that’s a potential deceptive practice in ad pricing.

2. Google’s Ad Business Under Scrutiny Too

Google’s investigation is broader — focusing on how they structure search and display ad auctions to possibly suppress competition. For Amazon sellers, the bigger issue is reserve pricing secrecy — a problem uniquely relevant to Amazon's marketplace.

What Amazon Sellers Need to Watch For

Whether you're managing ads manually, through PPC software, or with an agency — this affects you.

Opaque Auction Mechanics

Amazon hasn’t historically revealed how its search ad auctions work, and this lack of transparency can lead to:

Missed impressions despite “competitive” bids
Unexplained drops in ad visibility
Wasted ad spend due to guessing auction dynamics

Inflated Amazon CPCs

If reserve pricing is artificially high — and undisclosed — sellers may overpay without realizing it. That impacts ACOS, ROAS, and overall profitability.

Messy Attribution & Reporting

Even with Amazon attribution tools, the presence of hidden auction floors makes it harder to interpret why certain keywords or campaigns underperform — and harder to scale your Amazon PPC strategy with confidence.

How to Navigate This New Era of Amazon Advertising

Here’s how to adjust your approach based on how you currently manage Amazon ads.

If You Run Manual Amazon Ads:

Focus on bid elasticity testing — make incremental bid increases and track how they affect impressions.
Watch for sudden changes in ad delivery after small bid tweaks — a possible sign of hitting a hidden reserve price.
Prioritize clean campaign structures and detailed reporting to spot inconsistencies early.

If You Use Amazon PPC Software:

Not all Amazon ad tools are equipped to handle this shift. Avoid static, rule-based platforms that follow simple “if ACOS > 30%, lower bid” logic.

Instead, choose AI-powered Amazon PPC software that:

Adapts to real-time auction shifts
Analyzes bid-to-impression ratios
Accounts for seasonality and hidden auction behaviors
Provides full visibility into bid changes and ad placement outcomes

Platforms like Astra offer real-time bid optimization and full-funnel automation, helping brands respond faster to Amazon’s auction behavior — and potentially sidestep costly reserve pricing blind spots.

If You Work With an Amazon Ad Agency:

Ensure your agency understands the current FTC Amazon advertising investigation.
Request bid logs, impression share data, and any campaign-level visibility into unexplained CPC increases.
Ask about their strategy for dealing with undisclosed auction thresholds.

If their answers are vague or generic, you may be overpaying — and flying blind.

Amazon Ad Management Options: Pros, Cons & Use Cases

  
      Ad Management Method
      Pros
      Cons
      Best Fit For
    

  
      Manual
      Total control, strong learning
      Time-consuming, less visibility into auction behavior
      New sellers, <$10K/month
    

      Rule-Based Software
      Simple automation, low cost
      Poor adaptability to dynamic reserve pricing
      Early-stage sellers or low SKU count
    

      AI-Based PPC Software
      Real-time optimization, predictive bidding
      Requires good data, some tools lack transparency
      $10K–$500K/month brands
    

      Amazon Ad Agency
      Done-for-you, strategic support
      High cost, risk of poor transparency
      Established DTC brands, multi-channel sellers
    

Match Your Automation Strategy to Your Amazon Ad Spend

<$10K/month:

Use manual or rules-based tools to build PPC intuition
Focus on testing and learning auction behavior

$10K–$50K/month:

Upgrade to AI PPC software for better visibility and faster reaction to auction dynamics
Prioritize platforms that give you bid transparency and override controls

$50K+/month or managing multiple brands:

Use enterprise-grade Amazon PPC automation tools like Astra
Or work with a performance-focused agency that understands ad auction volatility

Transparent Auctions = Smarter Scaling

The FTC probe may drag out. Amazon may or may not change its systems.

But one thing’s certain: you can’t afford to guess anymore. If your ad platform doesn’t adjust to Amazon’s real-time behavior — especially around reserve pricing — you’re leaving profits on the table.

Want expert eyes on your ad setup?
👉 Book a free Amazon PPC audit with Astra — no pitch, just clear advice to make your ad dollars go further.

Build smarter. Spend cleaner. Stay ahead of the curve.