FTC probes Google and Amazon over ad pricing disclosures

The Federal Trade Commission is investigating whether Google and Amazon misled advertisers by failing to properly disclose terms and pricing for ads on their platforms, according to people familiar with the matter.

Driving the news:

• The FTC’s consumer protection unit is examining Google’s internal ad pricing processes and whether it raised costs without informing advertisers.
• Amazon’s real-time ad auctions are under scrutiny, including whether it disclosed reserve pricing — minimum price floors for sponsored listings.
• Both investigations build on prior antitrust actions against Google’s ad business and Amazon’s marketplace practices.

Why we care. Digital advertising is a multi-hundred-billion-dollar industry, with Google leading the market and Amazon quickly rising as the third-largest player. Lack of transparency in how ads are priced and placed could mean advertisers are paying more than they realize.

Context:

• Judges in two Justice Department cases have already ruled Google maintains illegal monopolies in search and ad tech.
• Amazon’s ad business generated $56 billion in revenue last year, but the company faces separate FTC trials on antitrust and consumer protection grounds.
• Google has previously acknowledged tweaking ad auctions to meet revenue targets without always disclosing changes to advertisers.

The bottom line. The FTC is signaling that ad pricing transparency — not just competition — is now squarely in its sights, keeping pressure on two of the industry’s dominant players.