Amazon Sued by FTC Over Claims It Ripped Off Advertisers

AWS announced plans to expand its AI Zone with Humain in Saudi Arabia for 2028, powered by Trainium chips and Nvidia infrastructure. It also confirmed its first cloud region in Saudi Arabia is on track for December 2026, with a $5.3B investment. Humain's ALLAM model and Fabric will be available on Amazon Bedrock and AWS Marketplace. AWS CEO Matt Garman stated the region will accelerate AI innovation and economic growth, with AI expected to contribute $130B to Saudi Arabia's economy by 2030.

Microsoft, Alphabet, Amazon, Meta, and Oracle are investing heavily in AI infrastructure, with investors scrutinizing returns. Microsoft and Alphabet show strong AI-related profit growth, while Amazon's AWS profits contrast with negative free cash flow. Meta's revenue grows, but costs rise faster. A Reuters analysis suggests these companies' capex may exceed combined free cash flow by 2027. Microsoft's Q4 2026 revenue was $90B, with $41B in capex. Alphabet's Q2 2026 revenue was $119.8B, with $24

The FTC and 22 states sued Amazon, alleging it overcharged advertisers via an opaque auction system, potentially extracting over $20B. Amazon denied wrongdoing, stating its systems benefit advertisers and consumers. The lawsuit seeks penalties and damages. Amazon's advertising revenue grew 26% YoY to $19.8B in Q2 2026. This follows other FTC cases, including a $2.5B settlement over Prime membership practices.

The FTC and 22 states sued Amazon, alleging it manipulated ad auctions, overcharging 1.2M businesses $20B since 2019. Amazon's stock fell 2.5%. The FTC claims Amazon used undisclosed reserve prices, increasing pay-per-click costs. Amazon denies wrongdoing, stating it saved advertisers $8B. The FTC seeks penalties and injunctions.

Amazon.com (AMZN) traded at $254.69, down 1.96% from its previous close. The decline follows a recent rally driven by AWS growth, Nvidia GPU partnerships, and positive analyst targets. AWS revenue rose 37% YoY to $42.2B, with a $496B backlog. Analysts raised price targets to $315-$355, citing AI demand. However, capital spending surged 68.44% to $54.21B, turning free cash flow negative.

The FTC and 22 states sued Amazon, alleging it secretly inflated ad prices. President Trump announced drug-pricing agreements with several pharmaceutical companies, including Astellas and UCB SA, to lower costs for Medicaid programs. Kalshi banned George Santos and fined him $71,356 for alleged insider trading. Trump asked Apple to rename Lake Ontario as 'Lake America' on its maps app, following an executive order.