FTC probes Google and Amazon over undisclosed ad auction terms

The Federal Trade Commission has opened probes into whether Google and Amazon misled companies that buy advertising on their platforms by failing to disclose key pricing terms and auction mechanics, according to people familiar with the matter. The consumer protection unit of the agency is gathering information on how the two technology giants price and sell search and listing ads through automated auctions, officials said, in inquiries that are ongoing.

The FTC is examining whether Amazon disclosed so called reserve pricing, minimum bids that advertisers must meet in the retailer's real time auctions for sponsored listings, the people said. Separately, investigators are asking about Google’s internal pricing processes and whether the company implemented undisclosed changes that raised the cost of ads for advertisers. The agency, Google and Amazon declined to comment, and the people spoke on condition of anonymity because the matters are confidential.

Both companies use automated auction systems that place ads within seconds after a user enters a search. Google dominates search advertising, while Amazon has become the third largest digital ad seller with advertising revenue of...