Google and Amazon under federal scrutiny for search advertising practices

The U.S. Federal Trade Commission is investigating whether Amazon.com and Alphabet’s Google misled advertisers on their platforms, a source familiar with the matter told Reuters on September 12.

The probes are being conducted by the FTC’s consumer protection unit and focus on whether Amazon and Google properly disclosed terms and pricing for ads placed on their websites.

The source said the FTC is seeking information on Amazon’s advertising auctions and whether the company disclosed “reserve pricing” — the minimum price advertisers must accept before they can buy an ad.

At the same time, the agency is reviewing Google’s internal pricing processes and whether the company increased ad costs in ways that were not disclosed to advertisers.

The FTC has sued Amazon in Seattle, alleging it enrolled users in Prime without their knowledge and made it difficult to cancel the service.

Separately, the U.S. Department of Justice is seeking to compel Google to sell off its advertising technology tools, after a judge in Virginia determined that the company held illegal monopolies. Both cases are scheduled to go to trial on September 22.

In addition, the FTC is pursuing another case against Amazon, alleging it maintains illegal monopolies among online superstores and marketplaces.

By Tamilla Hasanova