Amazon.com Inc. (NASDAQ:AMZN) shares are dipping Monday after a report that the Federal Trade Commission plans to sue the company over allegations it secretly manipulated ad prices paid by merchants on its platform. Here’s what you need to know.
- Amazon.com shares are experiencing downward pressure. Why is AMZN stock retreating?
FTC to Sue Amazon Over Alleged Ad Price Manipulation
The FTC intends to file a lawsuit against Amazon in federal court in Seattle, according to The Wall Street Journal, alleging the company quietly pushed up the minimum price merchants had to pay to advertise on its platform, generating tens of billions of dollars for Amazon over roughly seven years.
More than 20 state attorneys general from both parties are expected to join the case. It would mark the FTC’s third major legal action against Amazon, following a $2.5 billion settlement last year over Prime cancellation practices and a separate monopoly case set to go before a jury next year.
According to the report, Amazon began adjusting its ad auction system in 2018, quietly inserting its own bid, an internal tool called a “soft reserve,” to push prices above what the next-highest bidder had offered, without disclosing the practice to merchants. Investigators found Amazon leaned on this approach to nudge minimum auction prices upward in roughly 7 or 8 out of every 10 cases in recent years, and that on the busiest shopping days, per-click ad costs climbed by as much as half as a result.
Amazon has publicly acknowledged using reserve pricing, stating on a company webpage that such pricing “may affect the cost of your ad.”
Amazon’s Chart Shows a Pullback Within a Larger Uptrend
Amazon’s stock has slipped back toward its shorter-term trend lines, sitting about 2.7% below its 20-day average while still holding above its 50-day, 100-day and 200-day averages, a pattern that typically shows up during a routine cooldown inside a broader uptrend, especially with the 50-day average remaining above the 200-day following a golden cross in May.
Momentum is easing rather than breaking down. The relative strength index reads 48.95, a neutral level suggesting neither buyers nor sellers currently have the upper hand. More telling for the stock’s longer-term health is that shares remain 8.2% above their 200-day average, a threshold often treated as a marker of whether a bull market remains intact. The stock’s recent history reflects a fairly typical uptrend pattern, with RSI dipping into oversold territory back in February, a swing low forming in June, and a swing high arriving alongside the stock’s 52-week high in August.
Traders are watching $287 as resistance, just under the stock’s 52-week high near $287.20, a zone where past rallies have lost steam, and $226 as support, a lower level where buyers have previously stepped in if the pullback were to deepen further.
AMZN Shares Are Dropping
AMZN Price Action: Amazon.com shares were down 2.92% at $258.65 at the time of publication on Monday, according to Benzinga Pro.
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