The Federal Trade Commission is investigating whether Amazon and Google misled advertisers regarding the pricing and terms for their ads. As first reported by Bloomberg , the investigation is being conducted by the agency's consumer protection unit, and centers around the auction-style sale of advertising space by the companies.
Google sells ads using automated auctions that run after a user enters a search query. These auctions take place in less than a second. Amazon uses real-time auctions to place ads within its listings, which users would recognize as "sponsored listings" or "sponsored ads" when searching for specific products.
The investigation questions whether Amazon disclosed so-called "reserve pricing" for some of its ads, which is a price floor that advertisers must meet before they can buy an ad. For Google's part, the FTC is looking at certain practices by the search giant including its internal pricing process and whether it was surreptitiously increasing the cost of ads in ways that advertisers weren't privy to.
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The FTC isn't the only federal agency keeping a close eye on big tech. Earlier this year, a federal judge ruled that Google held a monopoly in online ad tech after the Department of Justice (DOJ) sued to break up the giant's ad business. Google also recently escaped mostly unscathed from a Department of Justice monopoly case involving its Chrome browser.