FTC Targets Google (GOOGL) and Amazon (AMZN) in New Ad Pricing Investigation

The Federal Trade Commission has opened probes into the advertising practices of Google (GOOGL) and Amazon (AMZN), examining whether the tech giants misled advertisers on pricing and disclosures. The investigations, led by the FTC’s consumer protection unit, target the companies’ search advertising systems and auction processes, where billions of dollars in ad revenue are at stake. Regulators are particularly focused on whether Amazon properly disclosed reserve pricing and whether Google’s internal processes raised ad costs without informing clients.

For Amazon, the inquiry adds to a growing list of regulatory challenges. The company is already facing FTC lawsuits over Prime subscriptions and alleged monopolistic control of online marketplaces. In this latest case, investigators are scrutinizing how Amazon structures auctions that determine ad placement, particularly whether advertisers understood the minimum thresholds required to secure space. The agency’s concerns echo broader criticism that opaque rules in digital ad markets distort competition and limit transparency.

• FTC probes Amazon and Google over ad pricing and disclosure practices
• Investigations focus on reserve pricing and hidden cost increases
• Both companies already face major lawsuits from U.S. regulators

• Amazon’s ad auctions under scrutiny for transparency in reserve pricing
• Google facing DOJ-led antitrust trial over dominance in ad tech
• Both trials scheduled to begin September 22

• FTC findings could reshape digital ad market rules and disclosures
• Potential for steep penalties or structural remedies if violations are found
• Advertisers and investors watching closely for shifts in platform practices

• The FTC’s investigations bring transparency and rule clarity to digital ad auctions, potentially leveling the playing field and restoring advertiser trust—benefiting reputable platforms with robust compliance and reinforcing long-term demand for Google and Amazon’s ad inventory.
• Addressing regulatory uncertainty now, rather than letting issues linger, could reduce long-term litigation overhang and allow both tech giants to control the narrative, implement necessary reforms on their terms, and demonstrate corporate responsibility to clients and markets.
• If inquiries result in clearer disclosures and pricing mechanisms, sophisticated advertisers may become more willing to direct larger budgets to Google and Amazon, while platforms can leverage improved trust as a competitive differentiator amid tightening data and privacy rules.
• A measured resolution (e.g., enhanced transparency, revised auction frameworks, or incremental fines) could remove a major source of risk and reignite bullish sentiment in the advertising and tech sectors.
• Strategic focus: Sales and product teams should proactively communicate with advertisers about improvements, position the platform as transparency-focused, and prepare tailored impact analyses to sustain commercial momentum through any regulatory-driven changes.

• Regulatory probes into ad pricing and opaque auction practices add to the mounting legal risks facing Google and Amazon, creating headline risk and increasing the chance of costly penalties, structural remedies, or mandated divestitures that could reshape core business lines.
• Heightened scrutiny could destabilize longstanding digital ad market dynamics, forcing abrupt changes to auction models and pricing disclosures that might drive advertisers to rival platforms or reduce overall spending due to perceived risk and complexity.
• Ongoing and overlapping antitrust cases—including parallel DOJ moves to break up Google’s ad tech stack—signal a more aggressive regulatory regime, extending the period of investor uncertainty and weighing on valuations for highly leveraged digital advertising names.
• Any significant findings or rulings may trigger knock-on regulations or global copycat actions, resulting in new compliance costs, technology overhauls, and potential limitations on data-driven targeting—all of which could compress margins and stall innovation across the sector.
• Action for risk and investor relations teams: Closely monitor regulatory developments, maintain active communication with key advertisers and stakeholders, and update risk scenarios to account for material shifts in ad-market structure, pricing power, or legal liabilities.

Google’s case runs in parallel with a Justice Department push to force the company to divest key advertising technology assets, in what could be one of the most consequential antitrust trials in years. Together, the actions reflect a coordinated escalation in Washington’s attempts to check Big Tech’s control over the $600 billion global ad market. For now, markets have reacted calmly, but the outcome could influence the trajectory of the companies’ highly profitable advertising divisions and the transparency standards across the industry.

The investigations underscore the heightened regulatory scrutiny facing the U.S. technology sector. With both Google and Amazon at the center of multiple lawsuits, the probes risk deepening investor uncertainty at a time when their advertising businesses remain core drivers of profitability. Any significant remedies or penalties could reverberate across the broader digital ecosystem, reshaping how online ads are bought, sold, and priced in the years ahead.