Amazon & Google under FTC scrutiny for transparency in ad pricing

The US Federal Trade Commission (FTC) is investigating whether Amazon.com and Alphabet.Inc’s Google misled advertisers about terms and pricing for ads placed on their platforms.

According to the report, the inquiries are being handled by the FTC’s consumer protection unit and focus on whether the companies properly disclosed how their ad systems work. The agency has requested details from the retailer about its ad auctions, including whether it informed advertisers about ‘reserve pricing’, the minimum price an advertiser must meet to secure a placement.

The reports noted that the judges overseeing two Justice Department cases against the tech company have already found the company has illegal monopolies in online search and some search advertising, as well as over technology used to buy and sell ads online.

For the tech company, the council is examining its internal pricing practices and whether the company raised ad costs in ways that were not made clear to advertisers.

Both the retailer and the tech giant are already facing separate trials this month in high-profile cases brought by federal agencies. The FTC has sued Seattle-based retailer, alleging the company enrolled users in Prime without consent and made cancellation difficult.

Meanwhile, the US Department of Justice is seeking to force the tech company to divest parts of its advertising technology business after a federal judge in Virginia ruled the company maintained illegal monopolies.

Both cases are scheduled to go to trial on September 22.

In addition, the council is pursuing another lawsuit accusing the former company of holding illegal monopolies in online superstores and marketplaces.