The FTC launched multiple investigations into Big Tech over their advertising and AI chatbots.
First up… The FTC is investigating Amazon and Google over whether they misled advertisers regarding the pricing and terms of their auction-model ads.
- Google sells ads using automated auctions that take place in a millisecond and run after a user enters a search query. The FTC is digging into Google's internal pricing process and whether it was increasing the cost of ads in ways that advertisers weren't aware of.
- Amazon uses real-time auctions to place ads within their listings. The FTC is investigating whether Amazon disclosed its reserve pricing for some of its ads, which is a price floor that advertisers must meet before they can buy an ad.
The investigations add another regulatory battle for both Google and Amazon, each of which face federal antitrust cases that are going to trial on Sept. 22 — Amazon for allegedly enrolling customers in its Prime subscription service without their knowledge and Google over an earlier finding that it operates illegal monopolies in the digital advertising sector.
But wait, there's more… The FTC is also investigating tech companies over the safety risks posed by their AI chatbots to kids and teenagers. Amazon is not part of this investigation (which is strange because they're also building AI chatbots), but Google is, as is OpenAI, Meta, Snap, xAI, and Character.ai.
The agency submitted orders to the companies to provide information outlining how their tools are developed and monetized, how those tools generate responses to users, and what safety-testing measures are in place to protect underage users. (That'll be a short page.)
The orders were issued under section 6(b) of the FTC Act, which grants the agency authority to investigate businesses without a specific law enforcement purpose.
This feels necessary… In August I reported on an internal Meta document that was leaked to Reuters detailing policies on chatbot behavior that permitted the company's AI tools to “engage a child in conversations that are romantic or sensual” and other unscrupulous conversations. The rules of conduct were approved by Meta's legal, public policy, and engineering staff, including its chief ethicist.
I questioned at the time how the rules of ChatGPT, Gemini, Claude, Grok and AI chatbots differ from those of Meta. Apparently the FTC is wondering the same thing. In hindsight, this is the kind of transparency we should have demanded from AI companies before they started having sensual conversations with minors, not after, but better late than never.
