Amazon Faked a Bidder for 7 Years — What It Cost You

The FTC says Amazon put a bidder that does not exist into its ad auction — for seven years — so the CPCs you paid on Amazon Ads were never the price the auction produced. Mike Ryan and Chris Scharmüller break down the FTC's case against Amazon Ads: what Amazon is accused of doing to its own auction, what it cost advertisers, and why Amazon's defense is not a denial.  Then the story Amazon would rather talk about — its demand-side platform plugging into ChatGPT ads, and what that does to targeting on a brand-new surface. For in-house PPC and ecommerce teams buying on Amazon, Google and now AI surfaces. **Key takeaways:** 1. A second-price auction only delivers its benefit if the auctioneer is trusted. The design makes honest bidding safe; a dishonest auctioneer turns that honesty into exposure. 2. The alleged mechanism is blunt: a bidder that does not exist, placed between the real second bid and the winner. The FTC says it ran from 2019 and extracted tens of billions. 3. The damage per click was small by design — calibrated to stay under advertisers' minimum acceptable return, which is why it went unnoticed for seven years. 4. Amazon's defense is not "we didn't." It is "no one was harmed, because targeting gains were pushing CPCs down anyway." 5. Precedent says spend does not move: nobody left Google after the DOJ hearings. 6. Meanwhile, Amazon's DSP brings real first-party targeting to ChatGPT ads — plugging that inventory's biggest gap and giving OpenAI a way to monetise intent it currently leaks to Google. **Resources & links:** ▶ Subscribe for new episodes: https://www.youtube.com/@smarter-ecommerce ▶ All episodes and show notes: https://www.smarter-ecommerce.com/en/podcast/ ▶ Follow smec on LinkedIn: https://www.linkedin.com/company/smarter-ecommerce-gmbh/ ▶ Mike Ryan on LinkedIn: https://www.linkedin.com/in/mikeryanretail/ ▶ Chris Scharmueller on LinkedIn: https://www.linkedin.com/in/christian-scharm%C3%BCller/ ▶ How smec manages Google Ads for retailers: https://www.smarter-ecommerce.com/en/ **About Smarter Ecommerce (smec):** Smarter Ecommerce (smec) empowers e-commerce brands with AI-driven PPC automation that optimizes for profit and business outcomes while maintaining strategic control. The platform activates first-party data - profit margins, customer lifetime value, and key business metrics - to automate campaign optimization toward goals like profitability and efficient growth, while detailed campaign insights provide full transparency and enable PPC teams to focus on strategic oversight rather than manual execution. As a Google Premier Partner and three-time Microsoft Retail Partner of the Year, smec manages over €500 million in ad spend and drives €5B+ in annual e-commerce revenue for 350+ global retail clients including THG, Snipes, REWE, and Intersport. **Make sure to follow smec - Smarter Ecommerce for more performance marketing insights:** smec - Smarter Ecommerce: https://www.smarter-ecommerce.com LinkedIn: https://linkedin.com/company/smarter-ecommerce-gmbh Newsletter: https://smarter-ecommerce.com/en/newsletter/ Instagram: https://www.instagram.com/smarterecommerce/