The Federal Trade Commission is investigating whether Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) misled advertisers that place ads on their websites and if the tech giants properly disclosed the terms and pricing for ads, according to a Bloomberg report on Friday, citing sources.
The report said the FTC is seeking details about Amazon’s auctions and whether it disclosed “reserve pricing” for some search ads—price floors that advertisers must meet before they can buy an ad.
The U.S. government agency is also looking into practices by Google, including its internal pricing process and whether it increased the cost of ads in ways that weren’t disclosed to advertisers, the report said, citing sources.
One source told Bloomberg that the FTC’s latest investigation emerged from its earlier antitrust case. In that complaint, the agency alleges that Amazon floods its marketplace with irrelevant results for search queries, making it difficult for shoppers to find what they are looking for and more expensive for sellers to use the platform. The practice effectively forces sellers to buy ads to make their product appear in response to consumer searches.