FTC Investigates Advertising Practices of Amazon and Google

The Federal Trade Commission is reportedly investigating the advertising practices of Amazon and Google.

In separate investigations, the regulator is looking into whether the companies properly disclosed the terms and pricing for ads placed on their websites, Bloomberg reported Friday (Sept. 12), citing unnamed sources.

Reached by PYMNTS, the FTC and Amazon declined to comment on the report.

Google did not immediately reply to PYMNTS’ request for comment.

According to the Bloomberg report, the FTC’s investigation of Google, which is the market leader in digital advertising, is looking into whether the company increased the cost of ads without disclosing that to advertisers.

In the investigation of Amazon, which is the third-largest online advertising company, the FTC is seeking information about the company’s real-time auctions of ads within its listing and whether the company properly disclosed “reserve pricing,” or price floors, for those ads, per the report.

In a separate case, the FTC sued Amazon in June 2023, alleging that the company had employed practices that “tricked and trapped” customers into signing up for Prime recurring subscriptions.

The suit argued that Amazon used “dark patterns” to dupe consumers into enrolling into the program, while also making it difficult to cancel their subscriptions.

Amazon has said the case has no merit.

Google faced a lawsuit from the Justice Department in which a judge found a year ago that the company operates an illegal monopoly in online advertising.

When the penalty was imposed, it barred Google from paying for exclusivity on devices and required it to share a limited amount of search data.

The penalty was far more modest than the Justice Department had sought, as it did not require Google’s parent Alphabet to divest any assets, or share its vast horde of data with competitors, and it allowed Google to continue to pay Apple and others for placement of its search engine and Chrome browser on their devices.

On Sept. 5, the European Commission fined Google €2.95 billion after ruling that the company abused its dominant role in the online advertising technology market.

The regulator accused Google of tilting the digital ads marketplace in its favor, disadvantaging advertisers, competitors and online publishers.