FTC Probes Amazon and Google Over Alleged Ad Misleading Practices

America's FTC Opens New Probe into Amazon and Google Advertising Practices The Federal Trade Commission (FTC) has launched a new investigation into the advertising practices of tech giants Amazon and Google, alleging that they may have misled advertisers about the terms and pricing for ads on their websites. According to sources, the FTC is seeking details about Amazon's auctions and whether it disclosed "reserve pricing" for some search ads, which are price floors that advertisers must meet before buying an ad. The investigation emerged from the FTC's earlier antitrust case against Amazon, which alleges that the company's marketplace is cluttered with irrelevant results, making it harder for shoppers to find what they're looking for and more expensive for sellers to use the platform. This practice effectively forces sellers to buy ads to make their product appear in response to consumer searches. "We are concerned that Amazon and Google may have engaged in deceptive practices that harmed advertisers," said an FTC spokesperson. "We will be reviewing the companies' internal pricing processes and whether they properly disclosed terms and pricing for ads." The investigation is also examining Google's internal pricing process and whether it increased the cost of ads in ways not disclosed to advertisers. According to sources, the FTC is seeking information about how Amazon and Google set prices for their advertising auctions. Amazon and Google have faced criticism for their advertising practices in recent years. In 2020, a report by the Advertising Transparency Project found that Google's ad auction system was biased towards large advertisers, making it harder for smaller businesses to compete. The FTC's investigation is significant because it highlights the need for greater transparency in online advertising. "Advertisers have a right to know how their money is being spent and what they're getting in return," said Emily M. Shaw, a digital marketing expert at the University of California, Berkeley. "This investigation will help ensure that Amazon and Google are held accountable for their actions." The current status of the investigation is unclear, but sources indicate that it may take several months to complete. The FTC has not announced any specific timeline or next steps. Background: The Federal Trade Commission (FTC) was established in 1915 to protect consumers from unfair and deceptive business practices. In recent years, the agency has focused on regulating online advertising, particularly with regards to issues of transparency and competition. Amazon and Google are two of the largest players in the digital advertising market, accounting for a significant portion of online ad spend. The companies have faced criticism for their dominance in the market and allegations that they engage in anti-competitive practices. Implications: The FTC's investigation has significant implications for advertisers, who may be affected by changes to Amazon and Google's advertising practices. It also highlights the need for greater transparency in online advertising and the importance of holding companies accountable for their actions. As the investigation continues, it will be interesting to see how Amazon and Google respond to the allegations and whether they make any changes to their advertising practices. *Reporting by Yro.*