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FTC investigates Google and Amazon over ad pricing transparency

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The U.S. Federal Trade Commission (FTC) has opened probes into Google and Amazon, examining whether the tech giants misled advertisers about the terms and costs of placing ads on their platforms, according to a source familiar with the matter.

The investigations, led by the FTC’s consumer protection unit, focus on whether the companies properly disclosed pricing structures and auction practices. Regulators are scrutinizing Amazon’s use of “reserve pricing”—a minimum price advertisers must accept before buying an ad—and whether those rules were clearly communicated. Google is being investigated for whether it raised ad costs internally without disclosing the changes to advertisers.

Both companies declined to comment on the probe.

The news comes as the two firms face mounting legal challenges. On September 22, trials are set to begin in separate federal cases:

  • The FTC vs. Amazon in Seattle, alleging the company enrolled consumers into Prime without consent and made cancellations excessively difficult.

  • The DOJ vs. Google in Virginia, where regulators are seeking the breakup of its advertising technology business, after a judge ruled the company illegally monopolized digital ads.

The FTC is also pursuing a broader case accusing Amazon of holding illegal monopolies in online marketplaces.

With the U.S. already pursuing multiple landmark antitrust and consumer protection cases, the latest probe further underscores regulators’ intensified scrutiny of Big Tech’s advertising power, a market worth hundreds of billions annually.

Microsoft’s Office-Teams Unbundling May Help Avoid EU Antitrust Fine

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Microsoft appears poised to avert a significant EU antitrust penalty as regulators are likely to accept its latest concessions regarding the bundling of Office and Teams, according to three sources familiar with the situation. This development follows sustained pressure from European competitors and comes amid growing transatlantic tensions over the EU’s scrutiny of American tech giants.

The case dates back to a 2020 complaint from Slack, owned by Salesforce, which accused Microsoft of gaining an unfair competitive edge by bundling its Teams app with its dominant Office productivity suite. German rival alfaview filed a similar complaint in 2023, intensifying the European Commission’s investigation.

In response, Microsoft unbundled Teams from Office in 2023, initially offering a 2-euro price reduction for Office without Teams and setting a 5-euro monthly price for Teams as a standalone product. After criticism from rivals that this pricing strategy was inadequate, Microsoft adjusted the terms again in February 2024 to widen the price gap and address antitrust concerns.

Sources indicate that Microsoft’s latest proposal also includes enhanced interoperability to allow rival platforms to better integrate with Microsoft’s ecosystem — a key demand from competitors seeking a level playing field.

The European Commission is expected to launch a market test in the coming months to gather feedback from industry stakeholders before issuing a final decision. While outcomes may still shift depending on this feedback, the current offer appears likely to satisfy EU regulators.

Despite having already paid over €2.2 billion in fines for bundling practices and other competition violations in the past, Microsoft has not commented publicly on the current negotiations.

This case unfolds against a backdrop of geopolitical friction, as former U.S. President Donald Trump has threatened retaliatory tariffs on countries that impose penalties on American tech firms, adding a layer of diplomatic complexity to the EU’s enforcement actions.

Microsoft Faces Extensive U.S. Antitrust Investigation

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The U.S. Federal Trade Commission (FTC) has launched a wide-ranging antitrust investigation into Microsoft, scrutinizing its cloud computing and software licensing practices, as well as its ventures into cybersecurity and artificial intelligence. The probe, approved by FTC Chair Lina Khan, comes ahead of her anticipated departure in January. The recent election of Donald Trump as president, with the expectation of a more business-friendly administration, leaves the future direction of the investigation uncertain.

Key concerns include allegations that Microsoft uses punitive licensing terms to discourage customers from migrating data from its Azure cloud service to competing platforms. This complaint has been echoed by rivals such as Amazon and Google, which have criticized Microsoft’s practices for allegedly locking customers into its cloud ecosystem.

Licensing Practices Under Scrutiny

The FTC is investigating claims that Microsoft imposes significant financial and operational hurdles on customers who wish to operate Windows Server on rival cloud services, reportedly charging a 400% markup in some cases. Additionally, competitors argue that Microsoft’s security updates are delayed and limited for customers using other cloud providers, further disadvantaging them.

NetChoice, a lobbying group representing tech companies like Amazon and Google, has also raised concerns over Microsoft’s integration of artificial intelligence (AI) tools into its productivity software, including Office and Outlook. According to NetChoice, Microsoft’s market dominance amplifies the impact of its licensing and integration policies, creating barriers for competitors.

Broader Context of Antitrust Scrutiny

Microsoft’s position as the world’s largest software company has shielded it from the brunt of recent U.S. antitrust actions targeting other Big Tech firms like Meta, Apple, Amazon, and Google. However, the company has faced increased scrutiny over its role in the AI sector, including investigations into its partnership with OpenAI and its $650 million deal with AI startup Inflection AI.

Google has also escalated complaints against Microsoft to the European Commission, alleging anticompetitive practices in the cloud computing market. This adds to mounting international pressure on Microsoft to address concerns over its business practices.

Historical Dynamics and Political Implications

While the Trump administration previously took an aggressive stance on Big Tech with high-profile lawsuits against Google and Meta, Microsoft often benefited from its policies. For instance, Microsoft won a controversial $10 billion Pentagon cloud computing contract in 2019, which Amazon later claimed was improperly influenced by Trump.

Legal experts suggest that while a change in administration may alter enforcement priorities, ongoing investigations often persist. The FTC’s probe could become a litmus test for how the incoming administration will handle antitrust enforcement in the technology sector.

Conclusion

As the FTC intensifies its scrutiny of Microsoft, the outcome could have far-reaching implications for the company’s operations in cloud computing, AI, and software licensing. The investigation underscores growing concerns about the influence and practices of dominant tech firms, particularly in emerging and critical sectors like AI and cloud services.