FTC Investigates Amazon and Google Over Ad Pricing Transparency
The **US Federal Trade Commission (FTC)** is scrutinizing **Amazon.com** and **Alphabet Inc.'s Google** for potentially misleading advertisers regarding the terms and pricing of advertisements on their respective platforms. The investigation centers on whether the companies adequately disclosed the inner workings of their ad systems to advertisers.
FTC Focus on Ad Auction Practices
The FTC's consumer protection unit is leading the inquiries, specifically examining whether **Amazon** properly informed advertisers about "reserve pricing" – the minimum price an advertiser must bid to secure an ad placement. This investigation seeks to determine if a lack of transparency in ad auctions potentially disadvantaged advertisers on the platform.
Existing Legal Battles and Monopolies
Notably, judges overseeing separate **Justice Department** cases against **Google** have already concluded that the company holds illegal monopolies in online search, some search advertising, and technology used for buying and selling ads online. These existing findings could influence the current FTC investigation.
Google's Internal Pricing Under Scrutiny
The FTC is also examining **Google's** internal pricing practices, investigating whether the company increased ad costs in ways that weren't clearly communicated to advertisers. This aspect of the investigation delves into potential hidden fees or unexpected pricing adjustments that may have impacted advertising budgets.
High-Profile Trials Looming
Both **Amazon** and **Google** are scheduled to face separate trials this month in prominent cases brought by federal agencies. The **FTC** has sued **Amazon**, alleging unauthorized Prime enrollments and difficult cancellation processes. The **US Department of Justice** seeks to force **Google** to divest portions of its advertising technology business after a federal judge ruled it maintained illegal monopolies.
Upcoming Trial Dates and Additional Lawsuits
Both trials are slated to begin on **September 22**. Furthermore, the FTC is pursuing a separate lawsuit against **Amazon**, accusing it of holding illegal monopolies in online superstores and marketplaces. These legal challenges underscore the increased regulatory pressure on these tech giants regarding their market dominance.
