Amazon's auction opacity spreads to its DSP

The FTC's lawsuit against Amazon over secretly charging near-full bid in "second-price" auctions is already spilling past the retail-search business it names. In a Data-Driven Thinking column, buy-side consultant Sarah Caputo works through Amazon's own documentation and finds the same opacity on the DSP side. Amazon's public guide to private marketplace deals says private auctions run on a second-price rule where "the highest bidder wins the impression but pays a penny more than the second highest bid," but Amazon DSP's help docs describe the identical Private Auction product, including Prime Video inventory, as clearing at a "variable CPM based on optimization" against a floor. The two descriptions cover the same product and contradict each other. Caputo found no buyer-visible floor amount, clearing formula, or explanation of which rule governs the final price. "A label can mislead by omission as readily as by commission," she writes. Amazon's own applied-economics team has published research conceding that "payment rules are only partially specified" in these auctions, and that soft floors can lift platform revenue even when every bidder is otherwise identical.

The crux

The FTC case may only name Sponsored Products and Sponsored Brands, but the auction-mechanics confusion it exposes runs across Amazon's entire ads business, including Prime Video supply, and buyers have no way to verify which rule sets their price.

Sell-side read

This is oxygen for premium, direct-deal inventory. When buyers cannot verify what "auction" means inside a walled garden, they route spend toward PMP, programmatic guaranteed, and direct deals with specific deal IDs where the pricing rules are stated, which favors publishers who can offer transparent first-price terms.

Watch

whether any DSP, Amazon's own or a rival, moves first to publish its floor and clearing formula as a differentiation point within the quarter.