FTC antitrust case puts Amazon’s fee stack and pricing algorithms under the microscope
Daniel Simon ·
The Federal Trade Commission’s antitrust case against Amazon has moved from rhetoric to specifics that cut to the center of the company’s marketplace power. Newly unsealed sections of the complaint and Amazon’s own financial filings outline how advertising and logistics fees have become central profit engines as the company polices pricing on its platform.
The complaint in FTC et al. v. Amazon.com, Inc., No. 2:23-cv-01495, pending in the Western District of Washington, alleges that Amazon used internal pricing tools and restrictive seller policies to suppress discounts and keep prices higher across the internet. A partially unredacted filing cites a program described as Project Nessie that the FTC says generated more than one billion dollars in additional profit by prompting competitors to raise prices after Amazon moved first. Amazon has said regulators are mischaracterizing a short lived test and that it discontinued the tool years ago.
The FTC and 17 state attorneys general also argue that Amazon’s rules punish sellers who list lower prices elsewhere by making their products harder to find on Amazon. In paragraph 242 of the public complaint, the agency describes how Amazon’s algorithms demote or strip the featured offer from sellers who attempt off Amazon discounts. The filing contends that this conduct deters price competition and steers consumers to offers that meet Amazon’s preferred criteria rather than the lowest available price.
Amazon’s recent financial disclosures provide context for the incentives at play. In its 2023 Form 10 K, Amazon reported approximately 140 billion dollars in net sales from third party seller services and roughly 47 billion dollars from advertising services. Both lines have grown faster than the core online stores category, which means a larger share of marketplace economics depends on seller fees and paid visibility.
Independent market researchers have documented the same trend from a seller perspective. Marketplace Pulse reported in 2023 that the combined take rate from referral fees, fulfillment and advertising often exceeds 50 percent for many merchants. The FTC cites similar dynamics to argue that sellers feel compelled to buy ads and use Amazon fulfillment to remain visible and eligible for the featured offer, which the company calls the Buy Box.
Amazon rejects the government’s theory. In a September 2023 corporate blog post, the company said sellers set their own prices and that its policies protect customers from list price manipulation and misleading discounts. It also argues that advertising improves discovery for shoppers and that fulfillment services are optional and competitively priced relative to alternatives.
H2: What the filings say versus the PR
The gap between public messaging and the record is narrowest in the details of how ranking and eligibility work. The FTC complaint includes internal documents indicating that ad load and placement affect organic visibility, which creates a paid gate for seller reach. The agency also points to controls that detect and penalize off Amazon discounting, even when a lower price would benefit consumers.
Amazon’s 10 K risk factors acknowledge broad antitrust exposure in the United States and Europe, but do not quantify the revenue at risk from potential conduct remedies. Advertising and third party services are now too large to be side businesses. Any court order that reduces the need to buy ads to stay discoverable or that loosens pricing restraints could flow directly to lower fee capture.
H2: Stakes and what happens next
The stakes reach beyond one platform. Millions of small businesses depend on Amazon traffic, and shoppers face higher all in prices if competition by discount is blunted. Rivals in logistics and retail media also contend with a gatekeeper that can tax visibility and distribution.
The case is in federal court with an extensive protective order and ongoing discovery, according to the docket. Regulators are seeking conduct remedies that would bar anti discounting rules and ad driven self preferencing, and they have left structural options on the table if conduct changes prove unworkable. Any order would likely require years of monitoring, and it would set a template for retail media and marketplace governance across the industry.