FTC investigates Amazon.com, Inc. (AMZN. US) and Alphabet Inc. Class C (GOOGL.US) search advertising business.

According to sources, the Federal Trade Commission (FTC) is investigating Amazon.com, Inc. (AMZN.US) and Alphabet Inc. Class C (GOOGL.US), focusing on whether the two companies have been misleading or inadequate in disclosing their advertising terms and pricing mechanisms, including whether they have failed to inform advertisers of the minimum bid for search ads and internal price hike details. Specifically, the FTC is requesting detailed information from Amazon.com, Inc. on its advertising auction mechanism, particularly whether they have disclosed the "floor price" of certain search ads to advertisers - the minimum price threshold that advertisers must reach before purchasing an ad. The investigation also involves Alphabet Inc. Class C's internal pricing process, including whether there are hidden cost increases in advertising that have not been disclosed to advertisers. According to one source, the latest investigation was sparked by the FTC's earlier antitrust lawsuit against Amazon.com, Inc. The lawsuit accuses Amazon.com, Inc. of having a significant amount of search results unrelated to user queries, making it difficult for consumers to quickly find the desired products, and causing sellers to incur higher operating costs on the platform, essentially forcing sellers to buy ads to gain exposure.