FTC Tells Search Engines to Disclose Paid Links

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."

Re:Does the FTC have jurisdiction?

[Syntari]

IANAL either, but for what it's worth:

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...

Teoma

[brunes69]

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.

bbc tour of googleplex on radio tonight

[Anonymous Coward]

I just finished listening to the bbc global business report which used this news as a lead in to a tour of the GooglePlex. Apparently it isn't online yet. There is an older story online that covers the tour, but tonight's is pretty good for explaining page ranking and such in simple terms. Peter Day, the host, also examines in depth the financial aspects of search engines. Look for it here [bbc.co.uk] in the near future.

I'm not trolling...

[orthogonal]

... serious question: of the sites mentioned in the CNN article (AltaVista, AOL Time Warner, Direct Hit Technologies, iWon, LookSmart, Microsoft and Terra Lycos), can anyone give me a compelling reason to prefer any of these to Google?

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.