The Federal Trade Commission sent Google, Yahoo, Microsoft, and other search engine developers to start labeling their ads properly. People should be able to distinguish between paid and regular ads.
Almost 24 search engines received the warning letter on June 24 from the consumer protection of the agency. Mary K. Engle, the agency’s associate director of advertising practices, wrote 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 letter was then revealed to the public on Tuesday detailed the guidelines that the companies can use to effectively separate the paid from regular ads. This included visual cues, labels, and other techniques. Failure to comply will trigger a probe from FTC for deceiving the consumers and will require them to pay fines. This is in accordance to Section 5 of its enforcement authority.
A Google spokeswoman said an interview with Wall Street that they have been doing that even before the letter came out. “Clear labeling and disclosure of paid results is important, and we’ve always strived to do that as our products have evolved.” Majority of the earnings of Google comes from paid advertisements.
Microsoft said that they were still reviewing the guidelines and will think of ways to make it work for their search engine Bing.
Yahoo, on the other hand, claimed that they have been transparent to the consumers and had made it easier for them to know which is paid and not.
The FTC decided to send a letter to the search engine companies after a survey revealed that most consumers couldn’t tell the difference between a paid and a regular ad whenever ads appear on the search results.
To view the letter, click here.