FTC Warns Google, Microsoft, Yahoo About Ad Labeling

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U.S. regulators have sent warning letters to two dozen search engines, advising them to make a clearer distinction between paid ads and search results. The Federal Trade Commission is updating its relevant guidelines, which were issued in 2002.

The Wall Street Journal’s Amir Efrati reported, “U.S. officials are warning Google Inc., Microsoft Corp, Yahoo Inc. and other Web-search engine providers to better distinguish between regular search results and paid advertisements. The warning came in a letter sent to 24 search engines Monday by the Federal Trade Commission’s bureau of consumer protection. Mary K. Engle, the agency’s associate director of advertising practices, states in the letter that ‘paid search results have become less distinguishable as advertising, and the FTC is urging the search industry to make sure the distinction is clear.'”

The Guardian’s Charles Arthur noted, “The FTC, set up to protect US consumers’ interests, does not name any search engine company in particular as having breached its rules. But it warns the companies that ‘consumers ordinarily expect that natural search results are included and ranked based on relevance to a search query, not based on payment from a third party. Including or ranking a search result in whole or in part based on payment is a form of advertising. To avoid the potential for deception, consumers should be able to easily distinguish a natural search result from advertising that a search engine delivers.'”

PCMag’s Chloe Albanesius added, “‘We have observed a decline in compliance’ with guidelines that the agency issued in 2002, which required search engines to ‘clearly and prominently distinguish … advertising from natural search results,’ Mary K. Engle, the FTC’s associate director for advertising practices, wrote to the companies. Given the ‘changes in digital media’ since 2002, the FTC this week issued revised guidelines that search engines like AOL, Ask.com, Bing, Blekko, DuckDuckGo, Google, and Yahoo should take under advisement.”

Digital Trends quoted a statement from Google, which said, “Clear labeling and disclosure of paid results is important, and we’ve always strived to do that as our products have evolved.”