FTC investigates Amazon and Google over advertising practices

New Delhi: The US Federal Trade Commission (FTC) is investigating whether Amazon.com and Alphabet’s Google misled advertisers that place ads on their websites, according to Reuters.

The investigations are being conducted by the FTC’s consumer protection unit and focus on whether the companies properly disclosed terms and pricing for ads.

According to Reuters, the FTC is seeking details about Amazon’s advertising auctions and whether it disclosed “reserve pricing” for some search ads. Reserve pricing refers to the minimum price advertisers must accept before they can buy an ad. 

The agency is also examining Google’s practices, including its internal pricing process and whether it increased the cost of ads in ways that were not disclosed to advertisers. Bloomberg News first reported the development.

Both companies are facing separate trials this month in cases brought by federal agencies. The FTC has sued Amazon in Seattle for allegedly enrolling users in Prime without their knowledge and making it difficult to cancel the service.

Meanwhile, the US Department of Justice is seeking to force Google to sell off advertising technology tools to resolve what a judge in Virginia found were illegal monopolies. Both cases are scheduled to go to trial on September 22. The FTC is also pursuing a separate case alleging Amazon holds illegal monopolies among online superstores and marketplaces.