Amazon and Google face FTC investigation over ad pricing practices

Judge rules Google operates illegal ad monopoly

Google acted illegally to maintain a monopoly in some online advertising technology, a federal judge in Virginia ruled on Thursday. Tom Rossman with the Henry George School of Social Science joins LiveNOW's Austin Westfall to break down the monopoly case.

The U.S. Federal Trade Commission is investigating whether Amazon and Google misled advertisers about pricing practices for online ads, according to a report from Reuters on Friday.

The FTC’s consumer protection unit is leading the probe, which is focused on whether the tech giants properly disclosed terms and costs tied to their advertising systems.

Alphabet, Google’s parent company, did not immediately respond to a request for comment. Amazon declined to comment.

Why regulators are looking at Amazon and Google’s ad practices

The agency is seeking information about Amazon’s advertising auctions and whether the company revealed its use of "reserve pricing," the minimum cost advertisers must meet before securing an ad spot, according to the source.

Investigators are also examining Google’s internal pricing processes to determine whether the company raised ad costs in ways that were not disclosed to advertisers. Bloomberg News first reported the inquiry.

The backstory:

The investigation adds to mounting legal pressure on both companies. Amazon and Google are already facing separate trials this month in federal cases focused on competition and consumer protections.

The FTC has sued Amazon in Seattle, accusing the company of enrolling consumers in Prime without consent and making cancellations difficult. The agency is also pursuing a separate case alleging Amazon maintains illegal monopolies in online marketplaces.

FILE - Logos of Amazon and Google. The Federal Trade Commission is investigating whether the companies misled advertisers about online ad pricing, according to Reuters. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images)

Meanwhile, the Department of Justice is pushing to force Google to divest advertising technology tools, after a federal judge in Virginia ruled the company held illegal monopolies. Both cases are scheduled to go to trial on September 22.

What's next:

The FTC has not commented publicly on the ad investigations, and it is unclear whether the probes will lead to formal complaints or settlements.

Both Amazon and Google continue to face heightened scrutiny in Washington as regulators target the power of large technology firms in online commerce and advertising.