The U.S. Federal Trade Commission (FTC) has launched a new round of investigations into the online advertising sales models of Google and Amazon, focusing on the pricing transparency of the advertising auction mechanism and whether there is any misleading behavior towards advertisers.
The case was led by the Federal Trade Commission's Division of Consumer Protection.Bloomberg NewsIt is alleged that the purpose of this move is to clarify whether the two major technology companies concealed key information during the advertising bidding process, thereby affecting advertisers' bidding strategies and costs.
Google currently uses an automated real-time auction system to sort ads and complete transactions in less than a second after a user enters a search term. Amazon, on the other hand, utilizes a similar real-time bidding mechanism to insert "sponsored products" or "sponsored ads" into its search results.
One of the focuses of the FTC's investigation is whether Amazon failed to clearly disclose its "reserve pricing," the minimum bid threshold that advertisers must meet to win ad space. As for Google, it is being examined whether it secretly adjusts advertising fees, causing advertisers to bear higher costs without their knowledge.
It’s worth noting that this isn’t the first time Google has faced antitrust or advertising transparency challenges. Earlier this year, the U.S. Department of Justice (DOJ) successfully persuaded a federal judge to rule that Google has a monopoly in the online advertising technology market and sought to break up its advertising business.
However, Google has successfully escaped another lawsuit against the Chrome browser monopoly, so it still maintains a major position in the browser market.
Federal Trade Commission Chairman Andrew Ferguson has previously stated that regulating large tech platforms is a current priority. As tech CEOs continue to secure policy support through investment pledges and high-level government engagement, regulatory oversight of the digital advertising market has intensified.
