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FTC Tells Search Engines to Disclose Paid Links
Posted by
chrisd
on Fri Jun 28, 2002 08:18 PM
from the keeping-lame-search-engines-in-line dept.
from the keeping-lame-search-engines-in-line dept.
linderdm writes "CNN has an article describing how the FTC wants search engines who receive payment for higher rated links, to disclose this to users. The concern is that users go to search engines looking for the best results for their search criteria, not the highest paid results for their search."
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that's great! (Score:4, Interesting)
Teoma (Score:4, Informative)
Teoma [teoma.com] also makes their sponsored links quite prominant. I use Google mainly, but once in awhile I try Teoma too, and am quite impressed. Teoma's "Refine" feature is really REALLY cool, and works well.
Parent
Will Slashdot be required to do the same? (Score:3, Funny)
Stacking engines based on being paid... (Score:3, Insightful)
Re:Stacking engines based on being paid... (Score:5, Insightful)
While this is good news for helping net newbies, i don't think they did this for the consumers. Probably a few well-known companies were a bit pissed off that search engines linked to competitors over them.
But if they are in it for the proper reasons, more power to them, and start addressing spyware.
Parent
Re:Stacking engines based on being paid... (Score:2)
oh, and if you have direct issues, you can complain to them directly. [ftc.gov] or you can just whine pointlessly online or on talk radio with unfounded accusations towards motives as most americans do.
Re:Stacking engines based on being paid... (Score:2)
Re:Stacking engines based on being paid... (Score:2)
I dunno about your correctness -sarcasm- but theres no way Yahoo could alter Google results before displaying them to you on Yahoo's site -/sarcasm-.
Is this even an issue? (Score:2, Funny)
So really, how many people would honestly be affected by this?
There's a very simple solution (Score:3, Funny)
Re:There's a very simple solution (Score:2)
Re:There's a very simple solution (Score:2)
Search: Linux
Linux is Communist
Linux is unsecure
If you use Linux you're supporting terrorism
Why Linux will cause your computer to explore
DRM, your hidden friend
Why Linux should be illegal
Linus is a big weanie
......
the horror... the horror
Re:There's a very simple solution (Score:2, Interesting)
You mean kinda like this [msn.com]?
No Action? (Score:3)
I guess I would have liked to see the FTC at least say "we plan to make this illegal" instead of:
Re:No Action? (Score:2)
oh really? (Score:3, Insightful)
Do they really believe that? The average joe really isn't going to care, and he probably thinks that if a site can afford to pay the search engine, it must be good.
Does the FTC have jurisdiction? (Score:5, Interesting)
If I accept advertising on a personal website, am I required to disclose the fact?
Perhaps the reason the FTC is not taking legal action here is there is no legal basis for them to. Under which law would they sue?
I'm not a lawyer, but I am genuinely curious about the legalities here. Any lawyers or other experts care to respond?
Re:Does the FTC have jurisdiction? (Score:4, Interesting)
Does the FTC really have the authority to do this?
Yep, it's interstate commerce.
Are there First Amendment implications?
Yeah, but commercial speech has limited protection [abuse.net]under the First Amendment.
Under which law would they sue?
Not sure, but it seems that it could fall under fraud, or unfair trade practices, or something. The FTC probably has leeway to invent its own rules, as well.
Parent
Re:Does the FTC have jurisdiction? (Score:2)
No money transaction = no commerce.
Are you kidding me? Even if you give it away, the Supreme Court is still going to rule that it "affects interstate commerce". Spam is interstate commerce. Local intrastate gun and drug trafficking is interstate commerce. The DMCA is probably based on the interstate commerce clause. Trademark law definately is. Maybe that's not the way it should be, but that's certainly the way it is.
Re:wrong (Score:2)
Whoa! What exactly constitutes goods and services? If I send a love letter to my girlfriend in another state, is that a "good"? Can the contents be regulated by the FTC? More to the point, if I run a newspaper, and have subscribers in multiple states, is the FTC immune from the First Amendment in its ability to regulate the content of my newspaper?
Re:Does the FTC have jurisdiction? (Score:4, Informative)
Section 5(a) of the FTC Act (check Cornell law school's helpful online United States Code at 15 U.S.C. section 45(a)) prohibits unfair or deceptive acts or practices in or affecting commerce. Omission of a material fact can be deceptive if the facts that are revealed are misleading in the absence of the omitted fact. If the words "search engine" (and the other text appearing on the engine's web site) lead most people to believe that the sites are ranked solely by relevance, then omitting the fact that some less-relevant sites are bumped up in return for a fee paid to the search engine could be misleading. What is "material", you ask? Well, nobody really knows for sure, but a typical formulation is "anything which significantly changes the totality of information available to the consumer" (to paraphrase a Supreme Court ruling in the securities law context), or "anything which a reasonable consumer would like to know in making his/her decision to use that particular search engine".
First Amendment implications? Sheesh. Do you think Land'O'Lakes _enjoys_ disclosing the number of calories in a butter stick? Or that RJ Reynolds puts "Surgeon General" warnings on its cigarettes as a marketing ploy to appeal to the subconscious deathwish of the nihilistic Gen X? Or that troubled businesses disclose profit warnings in order to attract investors? They disclose these things because they are forced to, because failure to do so would expose them to potentially massive liability. That is no different from forcing a search engine to make a disclosure about its sorting algorithm. No First Amendment problems in preventing fraud...
Parent
Re:Does the FTC have jurisdiction? (Score:2)
Ah, but in those cases they are selling a product, not just information. In the case of search engines, the product is information, rather like a newspaper. That's why I asked if there might be First Amendment implications. When selling food, you are required to disclose the ingredients, but food isn't speech. That's the distinction.
Re:Does the FTC have jurisdiction? (Score:2)
And, more importantly, if they can see a consistant pattern between multiple search engines that make the first, oh 2 or 3 pages, unmarked sponsored links the can prosecute under the RICO [usdoj.gov] laws.
Obviously hard to prove, but the Feds seem to be getting (oh gahd I hope) more fed up with coporate malfeasance
Stupid Idea (Score:3, Insightful)
If a privately owned search engine wants to get money for prioritized links, more power to them, that's free enterprise, it is their perogative to do business that way! If users dislike it they will go elsewhere and that search engine will be out of business. That's how the market works, the government doesn't need to interfere at all, the government is not your mom!
Re:Stupid Idea (Score:5, Insightful)
The more the government interferes with business, particularily online business the less of a free market it actually is.
This criticism doesn't work even from a pro-free-market perspective. Free markets depend on informed actors. If you really believe in free markets, then the government absolutely has an obligation to ensure that economic actors can base decisions on reliable information. (See WorldCom, Enron, Xerox, et al.). The more consumers know, the better the free market works.
Parent
Re:Stupid Idea (Score:3, Interesting)
Most people pick up a magazine and flip directly to the article they're interested in bypassing 90% of the advertisements. This has caused magazines to start intermingle half a page of content with half page ads to get the user drawn to the ad. The saturation of ads in the market place has caused the consumer to become desensitized causing ads to become less effective until a "new medium" of ad space can be found and then saturated. We've already seen that the web has reached it's saturation point. Unfortunately noone is learning. The marketing companies and companies funding them continue to put so much revenue in to ad streams that they could fund most small countries. The drug companies put more money into the stream than Nike and Budweiser and yet the primary way that consumers come to know their product is still via word of mouth or person to person representation. If a stock had such low returns most people would dump it and the company would go bust. But the marketing just keeps going up and up.
Sales slump, more money into marketing, price goes up to cover sales loss and new marketing funding - sales slump. It's a circle usually only broken by upswings in the economy or by product advancement.
I think that the government should focus on making sure that the college educated marketing firms have legitimate diplomas. I'm sure there's a little guy in a back room churning those things out by the thousands.
Re:Stupid Idea (Score:2)
So, does this complete "hands off" approach to life include, say, car makers manufacturing safe cars? What about employers who have unnecessarily unsafe working conditions?
Has it not occurred to you that history has shown that the free market does not fix all?
Besides, what's wrong with the approach that we are a country with a free market so long as everyone in it is dealing fairly and openly. Those who don't want to deal fairly and openly can go elsewhere. Is that so unreasonable?
Re:Stupid Idea (Score:2)
THE INTERNET IS NOT A MARKET
If you are a business guy, you might have to say it a few times, and maybe it will get through your head.
The Internet is a communication medium, much like the telephone system. Sure you can sell things over it and do some business because of it, but it is not a MARKET.
That said, I don't like the idea of the government meddling either. A technological solution must exist. Perhaps a rating system for search engines?
Don't leave it up to the companies though because they are run by money and are of course corrupt to the bone.
Re:Stupid Idea (Score:2)
Re:Stupid Idea (Score:2)
Sorry to break it to you, but the Government is in the business of regulating the marketplace, and does it all the time! Think about what the SEC does. They regulate how businesses account for their costs and expenses, and how they report them to their investors. What about debacles like Enron, and more recently, WorldCom. Look at Microsoft for crying out loud! They are all being hounded by the government for various illegal acts -- i.e., acting outside of the bounds of government regulations on how one carries on an honest business.
Businesses, on their own, will do everything they can to distort the truth, manipulate customers, control information, drive smaller operators out of business, and do whatever it takes to make more money. If you want to see an example of what it would be like if there was no "government regulation" in business, just look back to the Feudal system in Europe during the Dark Ages. For the most part, the "job" of the government when regulating businesses is to keep them honest.
Obviously, there are plenty of times when government oversteps this simle rule, or when they create loopholes such that the corporations are allowed to run roughshod over the intent of the law, but to say that the government has no business touching the market is to misunderstand the fundamental role of the government in keeping us from destroying each other.
I admit, I haven't read the article yet, but if it's anythng like what is done at Google, then they are not saying that sponsored links aren't allowed, but that they have to be clearly marked as such.
Re:Stupid Idea (Score:2)
Anyways, they're being pretty even handed so far, but maybe a few sites will see the light and do a better job now.
Good for me? Sure. Fair? No. (Score:3, Interesting)
This however, oversteps their bounds. What are they doing telling a non-government related business how to advertise, or what to put on their website? Don't they have a certain aspect of freedom of speech when it comes to composing and editing their websites as they see fit?
Now, of course I'm against any corporation defrauding the public as to what they do or how they operate, but is saying that a link was paid for really fraud? Yeah, it sucks that they can lie to you, but anyone can lie to you, it's your responsibility to be paying attention, not the government's to make sure that lies don't happen.
Now I'm not insane, I'm glad that I'll know that a particular link was a paid advertisement, but do we have to go to the lengths of legislating such a thing? Cut the red tape already...
Re:Good for me? Sure. Fair? No. (Score:2, Insightful)
Re:Good for me? Sure. Fair? No. (Score:3, Insightful)
This is a simple application of truth in advertising laws that have applied to other media like newspapers and TV for a long time. That's why drug companies have to ruin those pretty commercials with talk about all those nasty effects like diarrhea and vomiting. "And if your immune system is not normal due to advanced HIV infection, make sure your doctor knows to avoid a possible complication! Improvement was similar in patients that took a sugar pill." They try to distract you with high pressure flowers / colors / babies / fields / pretty people, but they have to say this stuff- it's the law. One type of ad that appears often in newspapers uses the format of a fake newspaper article- like "Amazing New Investment Makes Investors Rich". They try to make the fake article look as much as possible like the other, real articles. When they do this, they have to put the word "ADVERTISEMENT" in the corner, so you know it's an ad and not a real article. If you show a commercial with fat people turning into thin people, or poor people turning into rich people, you have to show "Results Not Typical" on screen. It's been that way for years without anyone making a stink about their First Amendment rights being violated. If you're going to advertise to me you'd better tell me what you're doing. You have the right to say anything you want but you have no right to deceive and there are laws in place to protect the public that prevent you from doing it.
Now, of course I'm against any corporation defrauding the public as to what they do or how they operate, but is saying that a link was paid for really fraud?
No, fraud is not saying that a link was paid for when it was.
Yeah, it sucks that they can lie to you, but anyone can lie to you, it's your responsibility to be paying attention, not the government's to make sure that lies don't happen.
Ha ha ha, yeah. "It sucks they can shoot you, but anyone can shoot you, it's your responsibility to be paying attention, not the government's to make sure that nobody gets shot." Uhh, I think it is the government's responsibility to regulate fraud. What are the responsibilities of government supposed to be, then? To maintain a standing army, and nothing else? You must be a troll. It fits with the big deal you make about being a Republican and how of course people are going to flame you for being a Republican.
Now I'm not insane, I'm glad that I'll know that a particular link was a paid advertisement, but do we have to go to the lengths of legislating such a thing? Cut the red tape already...
The FTC hasn't even said the sites broke the law. They're sending out a letter saying hey, point out your paid links, we don't think you should hide the fact that these are paid links if you are going to call yourself a "search engine", because that is not what a search engine does. The search engines show every indication that they will comply, and it looks like this story is over. The FTC did its job. The current no-bullshit standard for a "search engine" was preserved. The Internet's value as a public resource was conserved. And as even you yourself note, you're glad that you'll know if a particular link was a paid advertisement. So what is your problem? What is your point? Any regulation is evil?
Google's Method (Score:3, Insightful)
On the other hand, if I don't want to go to a site that will most likely be wanting to sell me something, then I don't have to.
Seems like it's the best solution all way round.
Re:Google's Method (Score:2)
In Googles case, they could create some tree structure that would list all adverts under the search category.
Hey CmdrTaco, you listening? You said you'd implement in the future
Gator-aid (Score:2)
sorry, they have a what? (Score:3, Funny)
a monkey? A chicken? hold on... wait a second, a
In other news, CNN reports that, and so you really should wear lead underwear during the next few days.
Truth in advertising? (Score:3, Insightful)
With the current state of affairs, you have something that looks like a gas station, is labelled like a gas station, has credit-card operated pumps like a gas station, and, after you insert your credit card, pump a tank full, get billed, and go to start your car, you find out they are actually selling chocolate syrup, but pretending it's gas, because no one wants to buy chocolate syrup.
I think that this is as necessary as the little label bars with "Advertisement" in them above and below fake magazine articles in magazines these days.
-- Terry
Totalitarians begin small (Score:2, Interesting)
How dare the government dictate how information, from a search engine that is composed exactly of SPEECH and the PRESS ought to be formatted to benefit the "consumer." That is unprecedented, and unconstitutional.
If we let them get away with this, it's one fast ride down a greased up slippery slope to control of information on the net.
Re:Totalitarians begin small (Score:4, Insightful)
Please check to see that your brain is in gear before letting your mouth run off.
The FTC isn't saying anything about how these corporations can conduct their business, or how they do their rankings, or who they accept money from. They aren't forbidding search engines from making money, or placing some sites ahead of others based on how much they have been paid.
All they are saying is that, when the results are presented to the customer, "matches" which are made primarily based on sponsorship are simply marked as such, so that the customer is able to make an informed choice.
Parent
best use of their time? (Score:4, Insightful)
As long as the site isn't outright claiming that they don't bias searches based on 'ad revenue' (payola), I don't see that they have done anything wrong in doing it. Could be an unwise move to do it if there is a public backlash, but it doesn't strike me as anything that tax paid "public servants" need to stick their nose in.
What about other types of "search"? (Score:5, Interesting)
The lowest fares (in an absolute, mathematical sense) are still there, just buried 40 pages deep into the search results. 99.999999% of all users won't bother to navigate past the first page, but the "complete results" are technically available for you to browse through.
This is just one real-life example -- there are endless, and I mean endless, types of games you can play by sorting of results. As long as the company has something to gain by skewing search results a certain way, some of the companies will choose to do so. (Yet another argument against any one private entity monopolizing access to a certain type of information.)
Aloha,
-Cal
Re:What about other types of "search"? (Score:4, Interesting)
I always thought that my search results with a certain on-line *travel* agent moved with *ocity* efficiency and would always give me the best price in its database.
Yet, when I restricted the search to my 'favourite airlines', I got different (ie better) results.
I thought it was a glitch. But you've made me think again...
Parent
I'm not trolling... (Score:2, Informative)
The only thing I can think of is that AltaVista allows searching for file types, but when I lasted used it ("Environmental sounds: mp3") it didn't buy me much.
About time (Score:2)
Search Engines... MMMMM-Kay (Score:2, Insightful)
They should indicate why that page was given the ranking, be it because of paid sponsoring, customer satisfaction, link popularity, etc.
Sure this will help other stack pages and compete, but a good search engine will help filter the crap out, especially if visitors can moderate the link.
Finally the FTC is doing something that will make the web better.
Search Engines that indicate why the link is rated higher will become more useful as people will find that they get what they need more often.
What's the problem here? (Score:2, Insightful)
Also, if you saw "Ford paid for this link's placement in your search result," wouldn't you frown on Ford for that? That's the kind of thing that devalues paid placement and bankrupts search engines trying to make money. I see that they're trying to point out where the corporate sponsors have infiltrated this *pure* system we've got going but I really don't see why the public has such a right to accurate search results that the government has to step in.
Deceptive advertising? (Score:4, Insightful)
Search engine positioning is a new issue. It's not an absolute rule that advertising has to be marked as such, but it's often considered deceptive to run an ad that isn't distinguishable from a story in a publication that runs both. Arguably, mixing paid and unpaid placements in a search engine should be treated similarly.
Actually, it's the selling of something advertised deceptively that's illegal, not the advertising itself.
Re:Google (Score:5, Insightful)
Maybe this is a non-problem. People will go towards the site that gives them the most reliable results. It's easy enough to learn which search engines are upfront about paid links, and which aren't. Caveat emptor, the better sites will win out. Having the State mandate behavior just encourages users to stop taking responsibility for their own behavior. People start assuming everything is safe and on the level, because hey, the State must be controlling it.
Parent