Meet Kevin 对 $AMZN 的判断变化

Amazon got sued by the FTC. The wire feed tells us that Amazon's FT or the FTC's uh claim fundamentally misunderstands how advertisers operate and that the FTC's own complaint sites no evidence of consumer price increases.

You could see Amazon did get hammered initially all the way down to 257 from 261, just a little more than a 3% decline.

Amazon down two.

So, uh we got a couple things to update here. Let's just break this down as simply as possible. Uh let's start with um well, there are two things to hit here. There's the Amazon and then Apple and then we'll do a valuation on uh on Apple as well.

These are the Max Studios M5 Ultra. Uh, okay. Let's get that. And then I want my notes here. This was on Amazon.

Amazon just got sued by the Federal Trade Commission. They're basically alleging that Amazon had a secret soft reserve placed above runnerups to inflate what people would pay for ads.

This is about basically 1.3 million advertisers who advertise on Amazon. And the question is, hey, like if all the advertisers advertising stuff with sponsored posts or even on Prime Video or whatever ended up having to pay more money to run ads, did customers end up having to pay more money because the cost of doing business was higher for those companies? And then Amazon secretly slid that money into their pockets.

Amazon ad revenue in 2025 was sitting at about uh $68.6 6 billion and uh that's uh you know this is a pretty juicy amount. So the big question here is how much potentially could that $68 billion move uh or that $68 billion of ad revenue end up getting affected going forward should let's say Amazon lose some kind of lawsuit against the FTC and then ultimately is it possible that states could end up trying to claw back some money from Amazon.

See, the FTC, it's worth noting, has a really hard time ever since uh well, there was a Supreme Court case where basically the FDC made it or the Supreme Court made it really hard for the federally uh sort of chartered FTC to claw back money from companies like Amazon.

So, this is probably why the FTC is partnering with states. 22 different states are partnering with the FTC on this lawsuit to go after Amazon alleging this uh mess regarding advertising.

And a lot of it has to do with shill bidding. So I'll explain shill bidding first and then I'll explain what the allegation is, what Amazon's doing, which it was alleged Google was doing as well. And then there's a smaller allegation that maybe even Meta is involved and they're all trying to scam you.

So, if we look at this chart right here, basically, if you are willing to pay $100 for an ad slot, uh, and Amazon tells you, hey, just tell us the maximum you're willing to pay. Don't worry if the second place price is $40, then we're going to operate a transparent and fair transaction process where if the next highest advertiser is only willing to pay $40, then we'll charge you, let's say, $41. That's typically how a second place auction is played.

Unfortunately, the allegation is Amazon started putting some sly kind of um inventory limits in and saying, "Oh, well, you know, because some inventory is more desirable than others, there might actually end up being a floor price that's like, oh, I don't know, it might just happen to be $90." And so now all of a sudden you're technically paying $50 more than this bidder because Amazon came in and put a secret for floor price in that was way higher than this.

Now Amazon says well that's not true. The FTC misunderstands this. We do this to regulate inventory and we've got disclosures around this. This isn't actually what's happening.

But this is actually worse than something called shill bidding. So shill bidding is basically when uh somebody goes on let's say eBay and they list an iPhone for sale for like one penny and then uh obviously we know it's not going to sell for one penny. So 10 people go bid it up to $10 and then the seller goes in and starts bidding 20, 30, $40 and then pumps that guy up and as soon as they outbid the other guy, they come in and cancel their last bid and then it jacks the auction price up in this case to 30 or whatever and it's putting in fake bids to find out to discover where the other person is in the auction price or auction process and it's illegal.

The problem is this is actually what we call worse than shill bidding because with a shill in the room, it's pretty obvious like you could see it in the bidding history. Oh, they bid up and then they canled and uh maybe they win but it'd be an accident because they usually end up uh uh cancing their fake bids. with Amazon. They basically the allegation is soft code in or code in a soft reserve that the FTC alleges is happening after the bidding process is over. So after you technically won, the FTC says Amazon's coming in and basically rigging the price.

Amazon since 2019 has secretly and systematically overcharged approximately 1.2 million advertiser advertising customers by manipulating the auctions that use it uh, to set the prices of their ads. Amazon overrides and replaces the actual results with higher prices set by Amazon to increase profits.

This is where they say that they disclose you'll just pay the minimum required to beat the ad. Uh, but the FTC says there's actually a secret floor price that Amazon puts in and that's not fair.

Amazon says, well, because ad placement offer different values to different advertisers, some reserve pricing functions may affect the price of your ad. So, they're kind of like, hey, don't worry. Give us your max price. We'll take care of you. Oh, by the way, we got this fine print and we reserve the right to charge you a floor price because we think we're worth more.

Amazon honestly I mean they got hit with like a 3% decline today which is like a $75 billion hit to their market value that almost already fully discounts like all of the potential risk of this like FTC settlement and clawback risk.

So really the bottom line of this Amazon case and the Meta case and the Google case is that these companies got to clean up their act a little bit otherwise they're going to get a whole lot more lawsuits. And my takeaway from all of this is that what'll probably happen is Google, Amazon, and Meta will clean up the transparency around their bid auctions because now that this is becoming so public, they don't want to be exposed to scamming their customers more than they already have.

And so there could be a slight slowdown in advertising revenue, advertising growth levels in the future because of these changes.

I just happen to think now that that punishment is in, they actually create a buy the dip opportunity for these guys. That's my take on Amazon, Meta, and Google and this FTC lawsuit.