FTC accuses Amazon of running a ‘secret ad surcharge scheme’ in new lawsuit
1:20 PM PDT · August 31, 2026
Amazon is facing a new lawsuit from the Federal Trade Commission (FTC) and 22 states, which accuse the company of secretly charging businesses more for advertising on its platform.
The lawsuit, filed Monday, claims Amazon spent more than seven years quietly increasing the prices advertisers paid through its online ad auctions. According to the complaint, the alleged practice affected more than one million brands and sellers and may have generated tens of billions of dollars in additional revenue for Amazon.
The 22 states joining the FTC are Alaska, Arizona, California, Colorado, Florida, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Vermont, and Washington.
The lawsuit centers on Amazon’s Sponsored Products ads, Sponsored Brands ads, and Display ads that run alongside its search results. According to the FTC, Amazon told more than 500,000 small and medium-sized businesses that it ran a “second-price” auction where the winning advertiser would pay just one cent more than the next-highest bid, rather than the full amount of their own bid. Because businesses believed they’d only ever pay slightly more than the runner-up, they had an incentive to bid high, trusting the system would keep their actual costs in check.
But the FTC alleges that starting in 2019, Amazon made a “surreptitious” change without telling advertisers. It added a hidden surcharge that Amazon internally called a “soft reserve price,” and used what one internal document called an “invented auction participant” — a fake bidder, basically — to push prices higher than true competition would have produced. The complaint alleges this amounted to a shill bid: rather than the price coming from a real competing advertiser, Amazon itself was manufacturing a higher number for advertisers to beat. As a result, the FTC claims Amazon charged Sponsored Products advertisers their own full winning bid close to 80% of the time — effectively turning what was marketed as a second-price auction into a first-price one.
The FTC claims Amazon made this change because it wanted more advertising revenue, and kept it hidden because disclosing it could have led advertisers to lower their bids, which would have cut into that revenue.
The company generated more than $68 billion in advertising revenue last year.
In a blog post, Amazon described the FTC’s lawsuit as “misguided,” arguing that the complaint “fundamentally misunderstands how advertisers operate.”
The company added that its auctions evaluate billions of bids across different placements and formats, so prices naturally vary, and advertisers are “properly” informed about the pricing system.
The Pentagon now has its own version of ChatGPT and Grok
1:13 PM PDT · August 31, 2026
The Pentagon has launched versions of OpenAI’s ChatGPT and xAI’s Grok, giving 3 million civilian and military personnel access to generative AI tools that have been tailored to “warfighter needs.”
ChatGPT Mil and Grok for Government — custom versions of the popular consumer generative AI tools — are now part of GenAI.mil, a centralized, secure portal launched last year.
GenAI.mil, which offered Google Gemini when it first launched, is designed to give Department of Defense employees access to commercial frontier AI models without sending sensitive government data through ordinary consumer channels. In particular, the official military version is exempt from the data collection that is difficult to avoid in consumer tech products.
And according to the Department of Defense, the generative AI portal has proven popular. GenAI.mil has already onboarded more than 1.7 million unique users out of the department’s 3 million personnel, according to the department.
These latest additions are part of the Pentagon’s broader effort to use AI tools to accelerate work and give the Department of Defense an edge without sacrificing security. They also highlight the absence of Anthropic’s Claude model and the Pentagon’s effort to work with other companies following its dispute with the frontier lab. Anthropic was labeled a supply-chain risk by the Trump administration — a designation that it is currently fighting in court — after it refused to give the Pentagon unrestricted use of its AI tools and instead insisted on certain safety guardrails.
ChatGPT Mil, which came out of the company’s OpenAI for Government program, will offer an experience familiar to commercial ChatGPT users. The tool will focus on chat, files, projects, and custom GPTs, according to the Defense Department. The tool will also support document-heavy, routine unclassified work such as administrative tasks, logistics, planning, and policy. Other features will be added over time.
The Pentagon positioned Grok’s capabilities and potential uses in much broader and more militaristic terms.
“Starshield AI’s Grok for Government will provide the warfighter with immediate productivity gains, stronger knowledge continuity and more secure and efficient collaboration,” according to the Defense Department’s press release. (SpaceX’s Starshield AI is a secure satellite network that uses the company’s existing Starlink tech)
The department added that Grok would allow its military “to execute missions faster and with greater precision across numerous operational contexts, ranging from market research analysis for acquisition professionals to supply chain management for logisticians.”
The Pentagon has struck deals with a number of other tech companies in a bid to boost its AI capabilities, including Amazon Web Services, Microsoft, Nvidia, and Reflection AI.
Apply now to host a Side Event at TechCrunch Disrupt 2026
12:32 PM PDT · August 31, 2026
We’re getting close to TechCrunch Disrupt 2026! From October 13-15, more than 10,000 innovators, founders, investors, and industry leaders will attend our event in San Francisco’s Moscone West, but the community gathering in the Bay Area stretches beyond those three days.
With our Disrupt Side Events program, you can bring people together anytime from October 10-16 for a custom event that gets promoted to Disrupt’s attendees. But time is running out — our deadline to apply for Side Events is this Friday, September 4, at midnight PT, so the time to apply is now!
What are the benefits of a Side Event?
Hosting a Side Event puts you in control of how your community meets up, placing your brand front and center with the people who matter most. Whether you’re a VC looking to spark conversations, a company ready to showcase breakthrough innovation, or a community builder with something to say, this is your moment to:
- Engage directly with thousands of the sharpest minds in tech.
- Build authentic relationships with potential partners, investors, and collaborators.
- Own your narrative and showcase your expertise on your terms.
- Generate buzz that extends far beyond the event itself.
Approved Side Events are all promoted to Disrupt attendees and the rest of our audiences through the official Side Events calendar and marketing channels.
What Side Events can you host?
Anything that aligns with your vision is likely to be approved. Everything from industry roundtables and VC office hours to deep-dive workshops to intimate dinners and casual networking happy hours have succeeded at past Disrupt events.
The format is yours to design — we just ask that you bring the energy and make sure it’s open to both Disrupt attendees and the broader public. We recommend hosting events that take place in the evenings during Disrupt from October 13-15, as there’s less competition and more post-conference excitement to fuel meaningful conversations with undivided audiences.
How can I apply for a Side Event?
You can look at the application form here, but it’s helpful to have a few things locked in before starting the application process:
- Have a venue selected in the Bay Area — this is all about in-person experiences.
- Have a title, description, and venue prepared for the event.
- Double-check the Side Events Host Guide and the Side Event Host T&Cs.
If you have additional questions, we’re here to help! Just email our Side Events team and we’ll follow up to help.
We prioritize events that provide meaningful value to founders, investors, and the startup community, but aside from that, you know your community and ideal audience the best! There’s zero cost to apply and participate, so let’s hear your ideas.
Apply by September 4 to be a part of Disrupt
Apply now and tell us your vision, goals, and what you need logistically in your application, and we’ll handle the rest to give your team the support and exposure you need to make the most of the community and opportunity Disrupt brings to San Francisco and the Bay Area.
Instagram puts new limits on undisclosed AI profiles
12:16 PM PDT · August 31, 2026
Instagram announced Monday that it’s changing how it labels AI-generated profiles and will start limiting the reach of accounts that feature AI-generated people without saying so.
The platform says it’s renaming its existing “AI creator” label to “AI-generated profile,” which Instagram says should make the disclosure easier to understand. The new label is meant to tell users that the person featured on a profile was generated or substantially created with AI.
Under the new policy, creators who don’t properly label an AI-generated profile could see their reach reduced. Creators who use the new label, on the other hand, won’t be penalized simply for having an AI-generated person as their profile subject.
The label also isn’t meant for every use of AI. Instagram says people who use AI to edit photos, polish captions, create graphics, or make other creative tweaks don’t need to use the “AI-generated profile” label.
Instagram says the change comes partly in response to users who have stumbled across profiles that looked like they belonged to real people, only to find out later that the person was completely AI-generated.
“As generative AI becomes a bigger part of how people create, we’ve heard that people don’t like seeing a profile that seems human, only to find out later that the person featured is AI-generated,” Instagram wrote. “They want to know when a profile features an AI-generated person.”
The timing is notable. Frustration over AI-generated content has been growing as AI influencers become more common across social media platforms.
For instance, earlier this year, the gay dating app Goose became the subject of a Wired investigation after a network of apparently AI-generated male influencers promoted the app on Instagram. Wired found more than two dozen accounts that appeared to feature AI influencers, some of which reportedly reached out to potential users through direct messages to get them to sign up.
Health and wellness content is another particularly worrying example. The New York Times reported in July it found hundreds of AI-generated doctors, healers, and wellness personalities on social media promoting supplements or making health claims to users.
The announcement comes after Instagram faced backlash over an AI tool that allowed users to generate images using other people’s likenesses. Users objected to having their public Instagram content used without an explicit opt-in. Meta then removed the feature.
Last week, Meta reached an $18 billion settlement with U.S. states over allegations concerning the effects of Facebook and Instagram on children and teenagers. As part of the agreement, Meta will introduce a default two-hour daily usage limit for teens across Facebook and Instagram, a “Night Mode” block, muted notifications during school hours, and other restrictions.
Apple’s top App Store exec, Phil Schiller, follows wave of exits as CEO Tim Cook steps down
12:02 PM PDT · August 31, 2026
Tim Cook is departing from his long-held role as Apple’s CEO — and a wave of top executives are heading for the exits as he does.
On Monday, Bloomberg reported that Phil Schiller, long the head of Apple’s App Store, stepped down from his position in recent days. Schiller has been with the company since 1987, with only a four-year break during that time. He took over the App Store in 2015.
However, Schiller won’t be leaving the company entirely. He will be staying on as an Apple Fellow, a role reserved for people who have made outstanding technical or leadership contributions to the company. In that role, he will be working on unspecified projects, although Bloomberg notes that insiders at the company believe that Schiller’s Fellow role is “a big step toward the executive ultimately retiring.”
Schiller shepherded the company through a lawsuit involving Epic Games over the App Store’s in-app fee system. Epic filed an antitrust lawsuit in 2020, claiming that Apple had created an illegal monopoly. The monopoly claims were ultimately dismissed, and the judge in the case largely ruled in Apple’s favor. However, the company was still ordered to ensure that app developers could link to external payment options. The legal fight is still ongoing.
As Schiller steps down, Apple plans to delegate day-to-day operations of the App Store to Carson Oliver, who has been at Apple for over 14 years and has worked in the App Store division for the entirety of that time. The App Store is also being transitioned from the marketing department to the services division, which is headed by Eddy Cue, Bloomberg writes. TechCrunch reached out to Apple for more information about the transition.
Schiller’s exit follows a series of other high-level departures for the iPhone maker. The company recently lost its chief operating officer Jeff Williams, who retired in December after 27 years with the company. The retirement of Lisa Jackson, vice president for Environment, Policy, and Social Initiatives, was also announced in December, as was that of general counsel Kate Adams. Jennifer Bailey, longtime head of Apple Pay, is set to retire in October after over 20 years with the company.
In June, Apple also lost Paul Meade, the Apple vice president in charge of the Vision Pro headset, who left the company to join OpenAI. In Meade’s absence, Apple has since downsized the Vision Pro team, which had lost around 100 employees as of two weeks ago.
As John Ternus takes the reins as CEO, he will be tasked with repopulating Apple’s ranks with a new generation of corporate leaders — among many other tasks currently facing the new chief executive.
