Amazon Lets Merchants Add Prime Delivery to Their Sites — As FTC Lawsuit Hits Ad Practices

Amazon Prime is no longer exclusive to Amazon.com. In a major logistics expansion, the company now allows merchants to display the coveted Prime delivery badge on their own websites, potentially reshaping e-commerce fulfillment. But this strategic push comes at a time when Amazon's advertising practices face unprecedented legal and regulatory scrutiny, including a multistate FTC lawsuit over hidden ad surcharges and a consumer watchdog lawsuit over Prime Video advertising.

Amazon Supply Chain Services Now Offers Prime Delivery on Merchant Websites

The key change is that Amazon Supply Chain Services (ASCS) is now allowing merchants to integrate fast, free Prime delivery options directly onto their own websites at no additional cost beyond standard Multichannel Fulfillment (MCF) fees. This initiative also introduces the MCF Preferred Pricing Program, offering Fulfillment by Amazon (FBA) sellers discounts of 15% to 25% on fulfillment fees for the first six months, according to an announcement on MarketMinute.

Previously, the Prime badge was reserved for products sold on Amazon's marketplace. Now, merchants can display the Prime logo on their own e-commerce sites without requiring shoppers to sign into an Amazon account. The move, reported by PYMNTS, effectively turns Amazon's logistics network into a white-label service that powers fulfillment for any online store.

How the Prime-on-Merchant-Program Works

Merchants using Amazon's Multichannel Fulfillment (MCF) service can enable the Prime badge for orders placed on their own websites. The fulfillment fees remain the same as standard MCF rates—no additional markup for the Prime perk. Under the new MCF Preferred Pricing Program, new FBA sellers receive a 15% discount for standard shipping and a 25% discount for expedited shipping for the first six months, lowering the barrier to offering Prime-level delivery speeds.

Feature	Previous Model	New Model (ASCS)
Prime badge location	Amazon.com only	Merchant's own website
Account requirement	Customer must have Amazon account	No Amazon login required
Fulfillment fee discount	None	15–25% off for first 6 months (FBA sellers)
Additional cost for Prime badge	Not available	Included in standard MCF fees

By extending Prime delivery to outside websites, Amazon gives merchants a powerful conversion tool: consumers associate the Prime logo with speed and reliability. For Amazon, it deepens its logistics footprint and captures fulfillment revenue from transactions that never occur on its marketplace. This is a direct response to competitive pressure from Shopify's fulfillment network and other third-party logistics providers.

FTC and 22 States Sue Amazon Over Hidden Ad Surcharges

While Amazon expands its Prime delivery program, its advertising business is under legal siege. On September 4, 2026, the Federal Trade Commission (FTC) and 22 states filed a lawsuit against Amazon, alleging that the company has been imposing hidden surcharges on advertisers using its Sponsored Products auction mechanism since 2019. According to the complaint, covered by WinBuzzer, Amazon allegedly used winning bids to artificially inflate the final charge to advertisers, affecting over 1.2 million advertisers, including more than 500,000 small and mid-sized businesses.

What the FTC Alleges

The core allegation is that Amazon's ad auction was not transparent. Advertisers place bids for keywords, but the final price they pay was allegedly manipulated by Amazon, resulting in hidden surcharges. The lawsuit claims this practice dates back to 2019 and has cost advertisers millions in overcharges. The FTC argues that Amazon violated the FTC Act by engaging in unfair or deceptive acts. If the lawsuit succeeds, Amazon could face significant financial penalties and be forced to change its auction system.

This is not an isolated legal challenge. In a separate development, a German consumer watchdog is suing Amazon for €1.8 billion over advertising on Prime Video, as reported by Heise. The lawsuit alleges that Amazon introduced ads to Prime Video without adequately informing customers or offering a fair price for the ad-free tier, a practice that has drawn consumer backlash across Europe.

Broader Regulatory Scrutiny on Amazon Advertising

The federal lawsuit is part of a wider pattern. In September 2025, the FTC probed Amazon and Google over search advertising practices, looking at how both companies handle advertising auctions and whether they give preference to their own products or services. Meanwhile, consumers have also voiced complaints. On Hacker News, a thread titled “Amazon Prime delivery false advertising?” highlights growing frustration with delivery promises not being met—a signal that Amazon's logistics brand, while powerful, is not immune to customer trust issues.

Balancing Growth and Regulation

Amazon's Prime expansion into merchant websites is a bold move that could redefine e-commerce logistics. By offering the same delivery speed off-Amazon, it gives independent merchants a competitive edge against larger retailers. However, the glow of this innovation is dimmed by the mounting legal challenges. The FTC lawsuit, if substantiated, could force Amazon to overhaul its advertising auction—a business that generated tens of billions in revenue last year. The Prime Video lawsuit in Germany suggests that consumer protection authorities are scrutinizing Amazon's monetization tactics across multiple fronts.

What This Means for Merchants and Advertisers

For merchants, the Prime-on-merchant program is a clear win: lower fulfillment costs and a trust signal that can boost conversion rates. But advertisers must be cautious. With the FTC alleging hidden surcharges, businesses that rely heavily on Amazon Sponsored Products may need to audit their ad spend and prepare for potential changes in how auctions operate.

Conclusion: A Tale of Two Amazons

The developments of September 2026 paint a dual picture of Amazon. On one hand, the company demonstrates remarkable operational agility by extending its Prime franchise beyond its own walls, lowering costs for merchants and improving delivery experiences. On the other, its advertising business faces a coordinated legal assault—from the U.S. FTC and 22 states, a German consumer watchdog, and an ongoing FTC probe into search ad practices. How Amazon navigates this tension between logistics expansion and advertising compliance will shape its trajectory for the rest of the decade. The Prime brand remains one of the most powerful in commerce, but its future depends on whether Amazon can sustain trust both as a delivery partner and as an advertising platform.