August 26th-September 1st // Estimated Reading Time: 8 minutes
Below is a roundup of last week’s notable industry news, with summaries and our opinions. Tsk-tsk Meta, YouTube, TikTok! And Tsk-tsk Amazon!
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Top Story 👁
FTC and 22 states sue Amazon over alleged secret ad surcharge scheme
Source: CNBC
August 31st, 2026
Summary: The US Federal Trade Commission and 22 state attorneys general have sued Amazon, alleging it secretly overcharged advertisers by manipulating its ad auctions, raking in more than $20B.
Amazon has long told advertisers its ad auctions run on a second-price system, where the winning bidder only pays a cent more than the second-highest bid. But the FTC claims that in 2019, Amazon secretly added a "soft reserve price", which one Amazon employee called an "invented auction participant" (essentially a fake second-highest bid inserted by Amazon) used to push up the final price an advertiser paid.
The complaint covers sponsored products, sponsored brands, and display ads, which represents a huge chunk of Amazon's $68B+ ad business. The FTC says Amazon manipulated auctions 70%-80% of the time🔒 in recent years. The practice allegedly increased pay-per-click prices by 50% on major shopping days and impacted 1.2 million advertisers overall, including 500,000 small businesses, all of which passed the extra advertising costs on to consumers in some shape or form.
Amazon is pushing back, calling the lawsuit "misguided" and arguing that consumers haven't been impacted. The company says its auction system actually saved advertisers $8B between 2021 and 2025 because of increased ad relevancy.
Amazon settled a $2.5B case with the FTC last September over allegations that it tricked customers into signing up for Prime and made it difficult to cancel. It still faces a separate antitrust trial in 2027, brought by the FTC and 17 states, over allegations that it inflated prices and squashed third-party sellers on its marketplace. The FTC and states are now seeking civil penalties, restitution, and other damages in this new case.
Opinion: Real-time bidding, hailed in some corners as the “savior of digital advertising”, strikes again as the “money sieve of digital advertising”. Who would’ve thought that trusting big, for-profit corporations to run blind auctions in order to create a fair economic marketplace might not be a great idea?
We don't know yet if Amazon is guilty. But there definitely is evidence.
Source: FTC
We’ve seen this movie before. Google's "Project Bernanke" reportedly let it see incoming bids from its advantaged position on both sides of the auction, pay publishers based on the lowest bid, charge advertisers based on the highest, and pocket the spread. Google's "Jedi Blue" deal reportedly had Facebook committing to spend at least $500M in Google's ad auctions in exchange for preferential treatment in the auctions. Index Exchange got caught using undisclosed “bid caching” tactics, winning auctions by using old, irrelevant bids. When companies control the auction and no one can see how it’s being conducted, the temptation for them to put a thumb on the scale is just too strong. Especially when they know other companies (especially the big ones) are putting their thumb on the scale in order to beat them. Regulators generally have no clue how digital advertising works, so the behavior goes unchecked until it’s too late. This isn’t an excuse for bad actors; it’s just the unfortunate reality.
If regulation gets passed that holds platforms more accountable to run fair and transparent auctions, great. But don’t bank on that happening any time soon. If you’re going to buy auction-based ads, you have to be willing to take the good with the bad. You build in whatever safeguards you can — auditing rights, verification vendors, contractual protections — and you still might get screwed. That's the tradeoff you make running campaigns inside a black box.
At the end of the day, whoever's selling the ads sets the price, and you decide whether to keep paying it. If the ads work, you keep buying. If they don't, you walk away. Operate off that principle, and no one gets hurt (not too bad, at least).
Other Notable Headlines 👀
Meta reaches landmark $18B settlement with states in trial over teen social media addiction - In addition to the $18B settlement, Meta agreed to roll out stronger child-safety measures on Facebook and Instagram, ending a landmark trial that accused the company of designing features to hook young users. New defaults include two-hour daily time limits for teens, a block on push notifications during school hours, and limits on "like" counts, and other features that let users compare their popularity to peers. Here's the catch: 30% of that settlement, about $5.3B, only gets released if YouTube and TikTok adopt similar safety features and pay a matching amount. Ever since the settlement was announced, Meta has been publicly lobbying TikTok and YouTube to follow suit. It’s good this is finally happening. Children must be protected. Advertising won’t be impacted much.
Gracenote strikes first DSP deal, giving The Trade Desk show-level CTV data - Historically, buyers could only see broad genre labels like comedy or drama when purchasing streaming inventory, not actual show titles. Gracenote, the CTV data company owned by Nielsen, will now supply program titles, descriptions, and cast data to sharpen targeting. The move addresses a longstanding complaint from media buyers about the lack of transparency into what they're actually buying on CTV. It's a notable expansion for Gracenote, which has mostly worked with programmers and distributors rather than the buy side. It signals Nielsen may be looking for more ways to plug its content data directly into the buying process.
The Trade Desk's Zuma update adds a host of AI-powered easy buttons to its Kokai platform - Zuma introduces a new conversational AI assistant (named Koa), ditches the widely panned periodic-table interface as the default view, and simplifies reporting and measurement, including the addition of one-click brand lift studies. It's the platform's biggest overhaul in three years and a sign that TTD is listening to buyers🔒 as it leans hard into agentic AI for its next chapter. While TTD is late to the AI game, we think it can still make up ground. The update landed around the same time that engineering SVP Aravind Chandrasekharan announced his exit🔒 after 12+ years, the latest in a long line of executive departures. It's been a rough patch for TTD, which is trying to claw back positive momentum after Q2 revenue growth slowed to just 3% and its stock fell more than 70% over the past year.
source: The Trade Desk
Other Notable Headlines
Sony launches 'Live TV on PS5' to connect advertisers with PlayStation users - The service brings more than 100 free ad-supported channels, including ESPN, Fox Sports, and NFL Channel, to 95M+ PlayStation users worldwide. It has been hard for advertisers to reach this gaming audience through typical CTV buys.
ChatGPT ads reach $1B, annualized, in 200 days - Advertisers can now buy directly through Ads Manager in India, Europe, the Middle East, and North Africa. The announcement comes days after agency complaints about lackluster performance surfaced on LinkedIn.
YouTube Shopping creators can now tag Amazon products - Amazon has officially joined the YouTube Shopping Affiliate Program, letting eligible US creators tag Amazon products directly in their Shorts, long-form videos, and livestreams. It gives creators another pathway to monetize product recommendations.
Omnicom combines Mediahub, Hearts & Science - The merged media agency, now called Hearts United, will be led in the US by Nicole Estebanell. The network spans 40 markets and an estimated $9.1B in 2025 billings, with a global CEO still to be named.
Republicans ask Supreme Court to block campaign advertising ruling - A federal appeals court ruled that political parties don't qualify for the discounted TV ad rates that individual candidates get. Republicans are asking the Supreme Court to reverse that ruling before the midterms.
The $1.81B cost of leaving TV - A new Simulmedia analysis found that advertisers who cut TV spending ended up spending roughly $3 of digital for every dollar they removed from TV to rebuild the reach they gave up.
Stripe and Advent walk away from PayPal deal - Stripe and Advent's $60.50-per-share bid for PayPal stalled over a pricing dispute: Stripe thought PayPal's rising stock reflected acquisition interest, while PayPal credited its turnaround plan. The deal would have been the largest merger ever in the payments space.
Peacock tests a membership rewards program with perks like free pizza - The beta program groups subscribers into tiers based on subscription tenure, with perks like NBCU Shop discounts, a free year of Instacart+, and a Pizza Hut BOGO deal for watching three movies.
That’s It For This Week 👋
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