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The Internet

FTC Tells Search Engines to Disclose Paid Links 197

Posted by chrisd 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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FTC Tells Search Engines to Disclose Paid Links More

FTC Tells Search Engines to Disclose Paid Links

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  • that's great! (Score:4, Interesting)

    by squarefish ( 561836 ) on Friday June 28, 2002 @09:23PM (#3790261)
    It's been a long time coming. Google [google.com] is the only engine currently doing a decent job of making clear which links are paid advertisements.

  • Will Slashdot be required to do the same? (Score:3, Funny)

    by king_ramen ( 537239 ) on Friday June 28, 2002 @09:25PM (#3790268)
    I guess not since we all know this site it suspect before we get here.

  • Stacking engines based on being paid... (Score:3, Insightful)

    by gatesh8r ( 182908 ) on Friday June 28, 2002 @09:25PM (#3790269)
    This is really good that the FTC is putting their foot down on this. Why? Being able to let users understand what is relevant to their search instead of all this corperate clutter and pay-offs that may or may not even be relevant. One thing that I do want to see more and more out of government groups is the further pushing of truth in how search engines index and give relevancy -- that is, what people are looking for, not "Click here and buy NOW!" Personally this should only help engines get more traffic -- like how google does things.

    • Re:Stacking engines based on being paid... (Score:5, Insightful)

      by Disevidence ( 576586 ) on Friday June 28, 2002 @09:30PM (#3790287) Homepage Journal
      If they're really into this for the consumer, then they should be investigating spyware and malicious web-pages under their jurisdiction.

      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.
      • well maybe if you morons would quit electing "less government, more freedom for large companies to screw you over" type politicians, then the ftc could look out for such issues you describe.

        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.
    • I think one of the PC magazines (I believe it is PC World) recently did a review about which search engine was the best. I remember that the tended to look down on engines that "hid" the paid links as the most relevant even when in truth they were not. Of course the study ranked google the best engine that was in the study. I believe Yahoo, Altavista, and other popular search engines were in the study.
    • If you don't like the results an engine returns don't use it. The government is too large as it is. If you want them to baby-sit everyone then don't complain when you are paying a 75% income tax. That and, depending on what you are looking for some of the most relevant links are the paid ones. This is one of the few areas where the internet can regulate itself, lets let it stay that way. -Tippy JPriest
  • If yahoo and the like would let users set options to where the user has to opt out of this to get the best search results, they'd probably be able to get away with it. Of course that'll raise more trouble with user tracking and still won't fix the trouble with internet novices not knowing that they can turn this option off and get valid search results. Maybe we should all just use google.

    • That's not gonna happen.
      Why?
      Money.
      The paid links are how search engines make their money (what would be the point otherwise?) so unless you're willing to pay for paid-link-free searching, they aint gonna give you an option to remove the paid links.
  • It's been a heck of a long time since I've heard of anyone using a search engine other than Google...

    So really, how many people would honestly be affected by this?
    • "So really, how many people would honestly be affected by this?" Anybody using AOL? Heh. Okay, being serious for a sec: at least it prevents Google from being bought up by somebody else and 'restructured'...
    • Amphibious Maleficus writes:

      It's been a heck of a long time since I've heard of anyone using a search engine other than Google...

      So really, how many people would honestly be affected by this?

      If you are sharp and focussed, know about Google and know what you want to find, you will probably use Google.

      But if most Americans watch an average of 5 1/2 hours of TV a day, then they are by default choosing to spend at least sixty minutes of their 16 or so waking hours staring slack-jawed at a bunch of commercials. These people might not qualify as the most self-willed bunch when it comes to how they spend their leisure-information hours.

      My own net activity varies. When I'm goal-directed and know what I want, I make a game out of trying to get a direct hit with the first Google "I feel lucky!" But truthfully, there are times when I just stare at the screen, the way you would hold the refrigerator door open and practice mouth-breathing when you don't know what you're hungry for.

      Sometimes I stumble unknowingly into someone's Search page, without planning to, most likely MSN or AOL. (For various reasons, when I log on, I have access to AOL, Prodigy, MSN, and Yahoo. That way, I think I get a more balanced view of how other people see the net.)

      Guys like these (MSN, AOL) try to toe the line between satisfying their sponsors by directing likely queries towards them and satisying the User (browser, consumer) who, let's face it, is also a sponsor, by giving them at least a semblance of valuable information.

      (But here's a pretty egregious counter example: This morning I happened to have a Browser problem where I couldn't access any WWW sites outside of the intra-AOL realm. I needed a text of the Declaration of Independenc, fast, and AOL's on-line World Book Encyclopedia had 17 articles on or about or referencing the Declaration of Independence -- but NO Original Source Text!)

      Now, a total slimebag money-grubbing All-Banners, All the Time Ad Pimp would probably lose user credibilty in a short time (recent history, won't go into it, you probably know more than I do anyway.) But meanwhile, moderately corporate, moderately informative Search engines will probably continue to attract moderately informed consumers.

      Nevertheless, even the Harvard Business School is coming around to the idea that in the long run, the only viable business model is: Quality generates loyalty, and loyalty generates money. Therefore, Google and those who follow a similar outlook (it's really a philosophy, not a "business model") always win in the end, because they are the best at what they do. They give intelligent results to intelligent users, and they seem to be aware that if you concentrate on providing quality and integrity, the money will take care of itself.

      In the old days, they used to call this "The Free Market of Ideas," and it's still a good thing, especially if that includes being free to have ideas about the Free Market.

      no clever signature,

      bankjobmaniac

  • There's a very simple solution (Score:3, Funny)

    by quantaman ( 517394 ) on Friday June 28, 2002 @09:27PM (#3790281)
    The very first time you visit a search engine you will have to sign an EULA that says (in 5000 words;) that you understand there are paid links and agree that they will be hidden. I'm sure the search engines won't mind...
    • But then how would the site know that every user has read the EULA? The only way would be for each user to have their own account. And I know that nobody wants to register to use a search engine.
      • I don't think there's a geek alive that wouldn't register with Google, as long as we could autologin securely that is....

        Yo Grark

        I stole this sig back
      • Yeah, as opposed to all those other EULAs that you've "read". Don't think it will happen? Just wait until M$ decides to get a search engine... just thinking about it gives me nightmares.

        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
        • Just wait until M$ decides to get a search engine...

          You mean kinda like this [msn.com]?
        • As it is, msn seems to prefer Windows related sites to Linux ones. I can't point to any particular search and say for sure, but try out some keywords for yourself and see.
          • At the same time, Google is heavily oriented towards Linux sites. Try searching for word processing at MSN and Google. MSN's first 5 results are two software stores (sponsored), the Microsoft Word home page, a product called Scriptware for the screenwriting industry, and the Microsoft Works home page. Compare this to Google, which lists "Linux Word Processing", a general guide to word processing style, the AbiWord home page, and two professional word processing firms. Google doesn't list the MS Word or MS Works pages in its top fifty results, and there are no sponsored links. (To find Microsoft Word, a Google search for word brings up the Microsoft product as link number four.)

            Moving along, I searched for the text processing package LaTeX with a search for latex. Google's first 12 results are all related to the text processing package, but what if people wanted information about the material latex? Google's link number 13 is about Latex allergies. MSN's first 15 results are balanced between the text processing package, the material latex, and products made from latex such as condoms.

            Lastly, I'll redo a search I did a couple of years ago to try and find Japanese text support in LaTeX. A search for japanese latex on Google results in nine relevant-looking links and one porn site in the first 10 results. MSN, surprisingly, offers 14 relevant-looking results and one Japanese latex manufacturer. No porn until link number 28 from MSN.

            MSN seems to prefer general-interest sites, whereas Google's relevancy scores are boosted by clickthroughs by their most loyal users, which would skew results toward... well, geeks. Both engines still produce useful results, and both indicate which results are sponsored.
            • That is a good point I guess. I always like google because I can search for the generic word "putty" and download the SSH client. Makes it easier for when I am working with network-crippled OS's like Windows.
      • I highly doubt the FTC is going to insist that every single user agree to the EULA, merely that the information is posted somewhere it can be easily accessed by those who care. A miniscule link at the bottom of the page, similar to the Slashdot EULA [osdn.com], would be sufficient.

  • No Action? (Score:3)

    by Wanker ( 17907 ) on Friday June 28, 2002 @09:30PM (#3790289)
    While the FTC said it doesn't plan to file suit against the search engines, it will send a letter to each calling for "clearer disclosure of the use of paid inclusion, including more conspicuous descriptions of paid inclusion itself."
    Somehow this reminds me of Aliens [imdb.com] where Frost says: "What the hell are we supposed to use, man? Harsh language?"

    I guess I would have liked to see the FTC at least say "we plan to make this illegal" instead of:

    Regulators said there is no determination the search engines broke the law, and it plans no other action.
    • The FTC can't plan to make things illegal. It can plan to pass regulations that define certain activities as violating already-existng laws, but even then they can be challenged in court, and if the court doesn't think the already-existing laws cover the issue, the regualtions are void.

  • oh really? (Score:3, Insightful)

    by NASAKnight ( 588155 ) on Friday June 28, 2002 @09:36PM (#3790313) Homepage Journal
    "When the search engines show that ads are ads, we're hoping consumers will flee these search engines," Ruskin said.

    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)

    by BitterOak ( 537666 ) on Friday June 28, 2002 @09:38PM (#3790321)
    Does the FTC really have the authority to do this? Are there First Amendment implications?

    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)

      by anthony_dipierro ( 543308 ) on Friday June 28, 2002 @09:50PM (#3790360) Journal

      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.

      • Yep, it's interstate commerce.
        People doing searches don't generally pay to use search engines. No money transaction = no commerce.

        The fact that companies pay money to have links there is irrelevant and doesn't make it "commerce" any more than me paying my ISP makes my website "commerce."

        • 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.

          • Spam is interstate commerce.
            Only because it's trying to sell you something to cause a money transaction.
            Local intrastate gun and drug trafficking is interstate commerce.
            People don't traffic guns and drugs for free: money is changing hands.
            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.
            And what does this have to do with the price of tea in China?
      • Ok.... so what if the search engines are located out of the country? Or what if they are in another country that does not have any sort of treaty with the US?

        • If they or their advertisers are engaging in commerce with the United States then they are under the jurisdiction of the FTC.

          Personally I feel the internet should be treated as a wholly separate jurisdiction, and that rules in that jurisdiction should be total anarchy, but I'm highly doubtful this is ever going to happen.

    • Re:Does the FTC have jurisdiction? (Score:4, Informative)

      by Syntari ( 575766 ) on Friday June 28, 2002 @10:05PM (#3790415)
      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...

      • 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

        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.

        • Ah, no. The products is organized information. If the organization if corrupt (ie a "common man on the street" has the beleif that search engine FOO provides results based on relevence, but in fact its based on bids) then commerce is corrupt.
        • 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.
          Try reading a dead-tree publication sometime... You'll frequently see something that looks on the surface like news, or other factual material, plainly marked as 'paid advertising'.

          No one is prohibiting or limiting the speech, only preventing confusion between editorial content and advertising. (It can be argued that in this day of media conglomerates the line is becoming blurred anyhow.)
    • Yes. interstate commerce

      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

    • Advertising and asosiated PR are not protected speech. They are corporate statements, and are required to be the truth.

      This is defined escentialy by Valentine v. Chrestensen (1942) in that "purely commercial speech" has no constitutional protection.

      Later, Central Hudson Gas and Electric v. Public Service Commission (1980) provided the 'Hudson Test' to determine if an Advertisment was editorial or political speech and if it was still suitable to restrict it.
  • This is Yet Another Reason Why I Want To Have Google's Children (YARWIWTHGC), they clearly disclose "Sponsered Links" and "Shameless Self-Promotion".

    • Re:Google (Score:5, Insightful)

      by JamesOfTheDesert ( 188356 ) on Friday June 28, 2002 @10:37PM (#3790513) Journal
      Gee, I wonder why Google discloses this information without the State stepping in and twisting its arm? Hm. And I wonder why people like Google so much. Hm.

      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.

  • Stupid Idea (Score:3, Insightful)

    by Deltan ( 217782 ) on Friday June 28, 2002 @09:41PM (#3790331)
    This is a retarded idea. Here's why. The more the government interferes with business, particularily online business the less of a free market it actually is. If in fact it is important that users see what is relevant before paid results then the marketplace will change to demand that from search engines. Consumers will flock to what they want to use. The fact that the majority of Internet Cattle are made up of stupid people shouldn't really factor into this at all. People should find out for themselves how search engines work, people shouldn't have to rely on the government to protect them. In the famous words of Jesse Ventura, "The government is not your mom!"

    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)

      by yali ( 209015 ) on Friday June 28, 2002 @09:59PM (#3790394)

      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.

      • Re:Stupid Idea (Score:3, Interesting)

        by nhavar ( 115351 )
        Your sorta right. There's still a flaw though. Lets assume that I go to searchX for all my search needs. Soon I start to notice that the first link I click on never really deals with the issue that I'm searching for but is usually just pushing a product. After repeating this process a few times I begin to learn that if I go to the second page of the result set I actually get closer to the things I'm looking for. Soon I'm no longer even glancing at the first page I'm going directly to the second or third page. Websites and search engines would do well to learn from the failures of their material counterparts the magazines and broadcasting industries.
        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.
      • 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

        WRONG! The government does not have an obligation to inform the consumers of the world. The consumers have an obligation to inform themselves. Magazines such as Consumer Reports prove that the free market is able to handle this responibility.

        Nowhere in the Consitution does it state that the government has an obligation to keep consumers informed. However, it does state in the tenth amendment that "The powers not delegated to the United States by the constitution, nor prohibited by it to the states, are reserved to the States respectively, or to the people." This means that the federal government cannot do anything that is not expressly allowed by the constitution. I don't think that the constitution states that the government is obliged to keep the people informed about economic decisions. Therefore organizations like the FTC that try to keep consumers informed, although their intentions are good, need to butt out, because keeping consumers informed is not the government's responsibility.

    • 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?

    • It's called "Truth in advertising". When you go to a search engine to find something, the average person expects the search engine to do what it claims: sort by accuracy. When the search engine behaves differently than they advertise it to, or make it difficult to discover how it behaves, they are commiting false advertising. This is BAD.

      You are correct that in a free market, a buisness may choose it's own model. However society as a whole has a right to protect themselves from unethical practises. THAT's what the FTC is doing, ensuring that users are aware that some of these links (and possibly which) are in fact paid ads, and not sites ranked according to their criteria.

    • 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.
    • I disagree. Part of the government's job to to protect its citizens. That means companies that attempt to decieve you must be cracked down on. That's why we have truth in advertising laws, and that's why they are cracking down on search engines. Can you honestly say given any search engine you can tell if it has paid results or not? Can you honestly say that you know for sure that google doesn't do that? I sure can't, so how will I know who to choose based on paid placement of links?
    • The more the government interferes with business, particularily online business the less of a free market it actually is.

      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.

    • Dude, Slashdot's high school leftists are going to be enraged by this.
    • So how is a government agency mailing out official letters stating it's position on sponsored links qualify as 'interfering.' They aren't even cease and desist letters that the RIAA loves sending out so often. To put it simply they've said in essence, "We really feel that Google has a great method of diclosing advertized links, and we feel that all search engines should be as straight forward. People don't really expect links to be ranked by how much money they paid, either. We're not going to do anything yet but this is our opinion on paid links."
      Anyways, they're being pretty even handed so far, but maybe a few sites will see the light and do a better job now.
    • > 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!

      I agree.

      > If users dislike it they will go elsewhere and that search engine will be out of business.

      I agree again. But how will users know which or how many links were prioritized for money?

      For comparision, I have a Time magazine next to me. On page 83 is a paid advert made to look like an article. How do I know it's an advert? In (really) small print at the top of the page is the word Advertisement. That's it. Was this an unfair restriction on Time magazine's advertising scheme?
    • The retarded idea is that the Net should be "commercially-enabled" all the way long.

      When you go into a search engine you don't always search for something to buy ! You sometimes (sic) search for relevant information. And when link are sponsored by money, then the relevance is dropped out and skew your search.

      as for the governement not being your mom, if there wasn't a governement it would be the law of the strongest. Or complete anarchy. So in other word , unless you ant compelte anarchy, what you "wish" is the advantage without the inconvenience [intervention] of a governement. In other word , wishful thinking.
  • Save yourself the trouble. Really. It's just not worth it:

    Here. [google.com]

    Really. The way is it supposed to be done.

  • Good for me? Sure. Fair? No. (Score:3, Interesting)

    by Schmelter ( 563031 ) on Friday June 28, 2002 @09:46PM (#3790346)
    I'm going to let you in on a dirty little secret I'm a Republican. You can flame me for this later. But being a Republican, I believe in the independence of the people from the government, and extend this independence for corporations as well. I believe in a fair, and open marketplace free of monopolies, which is exactly what the FTC was setup to enforce by enforcing the Sherman act of 1890. So, as a whole, I'm pro FTC.

    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...
    • Actually, this is merely requiring search companies to disclose conflicts of interest. Eg, best result for a query and the desire to upsell site rankings. It is required in other areas, like real estate, already so I don't think this is over stepping precedent.

    • It's not saying the link was paid for when it was that's fraud. That's what some search engines do, you type in a search and they return results based not purely on how well they match your search but biased based on how much someone paid the search engine. What the FTC's warning the engine operators about isn't that doing that is against the rules, but that doing that while trying to lead the consumer to believe they aren't is fraud.

      And the FTC already does this for everything else. All they're doing is putting the search engines on notice that they have to follow the same rules as everyone else: sell what you want how you want, but you'd better say honestly what you're selling and what the terms are. If a business has a problem with that, I don't want to do business with them anyway.

    • 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?

      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?

      • I've been writing on this subject a lot lately, but I want to take a crack at concisely explaining a few fundamental ideas to everyone concerned.

        Rule #1: Don't talk about Fight Club.

        Rule #2 (okay, fine, the rest of these aren't really "rules"): Trade is necessary to create wealth since two people can create more wealth in cooperation than they can independently.

        Rule #3: Market economics is a way of "organizing" trade. Really, though, it's a way of letting people's self-interest act as the organizing force and the end result is that the market naturally tends towards maximum wealth creation.

        Rule #4: "People's rational self-interest" won't very effectively encourage people to cooperate if they have an alternate means of getting wealth than participating in its production. Such as, a big rock they can use to hit Igor over the head and steal his sheep. That's a broken market. Because people will naturally do this sort of thing (literally violent, or metaphorically violent in terms of violating the proper functioning of the market), government of some sort is absolutely necessary in order to prevent this.

        Rule #5: Killing people is obvious. As we move into more and more subtle varieties of violating the proper functioning of the market, things get murkier in terms of whether and how much regulatory oversight is required. Really, this calls for a cost/benefit analysis where you evaluate how large a risk certain types of things are, and how badly they would violate the market, and how much inefficiency (as a result of diversion of resources into regulatory activity) would be generated by policing for it. People have lots of different opinions on this, and this is where people argue.

        Rule #6: It can be helpful to think of market economics in some sort of physical terms. I like to vaguely imagine water flowing downhill. But the general idea is that the "movement" toward increased ecnomic efficiency is an aggregate movement that results from smaller movements that, as you scale down, look increasingly chaotic. More to the point, at all levels of description it may not be possible for the system to reach a given lower inefficiency level without moving through a higher inefficency first. And that usually won't happen. The point is that markets don't achieve perfect efficiency, and they certainly don't achieve perfect efficiency at all levels of description, e.g., locally.

        Rule #7: Because of that last bit, there very well may be quite a few locally optimal or desirable economic "states" that a market won't achieve without intervention. In some cases, that little "energy" expenditure will reap benefits in powering the market to a higher efficiency than it otherwise would have reached. In other cases, that expenditure increases economic inefficiency as the price to pay for a specific, local, desirable outcome. Doing this makes sense in many cases, particularly when human values about intangible things are involved.

        Most conservatives that complain about government intervention in free markets don't complain about nationalized defense and nationalized highway systems, even though both are undoubtedly less efficient (on the whole) than they would be if privatized. The reasons why conservatives tend to find this acceptable are completely valid reasons to find other government intervention acceptable.

        I hope this helps someone think about these issues. As you and others have said, although in theory the market would take care of fraud itself; in practice it doesn't always (or if really subtle, it won't at all), and most people, even conservatives, don't have too much of a problem with prosecuting fraud. Truth in advertising is really just a variation on that theme.

        • I should have included a key point about why market economics is, currently, the best method for increasing economic efficiency.

          Put simply, we're not smart enough to design this stuff ourselves. Maybe someday we will be. (Complex adaptive systems simulation of market economies and the resultant possibilty for good experimentation could really make a huge difference here.)

          People don't really understand just how complex economics really is. I'm reading Ian Stewart's "Flatterland", and I enjoyed the part where a character explains the geometricization of algebraic variables as generalized dimensionality. Thus, a horrendously simplified economic system with a hundred different agents (acting simply! which they don't!) is like describing things in a 100-dimensional space. Economics is far, far closer to organic chemistry and biology than it is to simple mechanics. And yet, many people expect that they can have a job, and plenty to eat, schools for their kids, and maybe some entertainment, all as a result of some designed economy. But that's absurd.

          At present.

  • Google's Method (Score:3, Insightful)

    by Bilbo ( 7015 ) on Friday June 28, 2002 @09:49PM (#3790356) Homepage
    I have to say I really like the way Google does sponsored links. They are right there, up at the top, clearly marked. That way, if I want to go to the sponsoring site, I can, but with the full knowledge that they were probably not selected because they were the "best match" to my query, but because they paid for the spot. If I go there, then I'm probably looking to buy something in the first place, and I'll be much more likely to spend my money.

    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.

    • Actually, what Google AND slashdot could do is have a HTML page devoted to paying advertisers. I'd love to surf through Slashdot's ads. Some look really catchy, but 1 click and they go on to the next one.

      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 ;-)

  • Ridiculous (Score:1, Interesting)

    by Anonymous Coward
    This is a really poor decision on the part of the FTC - they shouldn't be "warning" companies, particularly if what they're doing is not in any way illegal. The market should decide. The rise of Google in what at the time was a saturated search market dominated by AltaVista is clear proof of that.

    If a search engine displays poor results, people will stop using it. If the results are good, then they'll come back. It really doesn't matter how the results were created, through some complicated heuristic or through sponsorship.

    Search engines have no obligation to be "editorial" - they're not newspapers, and they make no claim that their results are free from bias. It is beyond me why Ruskin would think otherwise.
  • I think they are doing this as an extension of being asked to look into that stupid Gator spyware, learning that it's not the only thing that makes searchresults unfair.

  • sorry, they have a what? (Score:3, Funny)

    by Coolfish ( 69926 ) on Friday June 28, 2002 @09:58PM (#3790389)
    CNN has an describing

    a monkey? A chicken? hold on... wait a second, a .. an article! Yes!! Yes an article! CNN has an article! Written by a monkey. As such, it's completely classified and we cannot give a link.

    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)

    by tlambert ( 566799 ) on Friday June 28, 2002 @10:02PM (#3790406)
    Yeah, it's annoying when a web catalog business pretends to be a search engine, but instead of returning "best match" returns "catalog item #53715".

    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
  • Search engines are for-profit corporations. They ought to be able to do what they please, so long as they are not doing direct harm to others. That is the essence of capitalism. If consumers of information demand unbiased searches, then they will gravitate to search engines that advertise such. Again, this is how capitalism works: the company that provides what the customer wants succeeds.

    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.
    • The problem is not "paid ranking" its the "illusion of unbiased search". If you want to run a search engine that only ranks based on the payola to your pocket. More power to you. Users just need to have that disclosed.

    • Re:Totalitarians begin small (Score:4, Insightful)

      by Bilbo ( 7015 ) on Friday June 28, 2002 @10:23PM (#3790468) Homepage
      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.

      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.

      • The FTC isn't saying anything about how these corporations can conduct their business,...

        [snip]

        they are saying is that, when the results are presented to the customer, [the FTC requires that some results be] marked....

        Hmmm... this was modded up higher than my original post for being insightful? Wow. Obviously I am insufficiently clueless as to how to whore for karma around here.
    • Thanks for discrediting your own post.

      It's quite amusing when people think it helps their argument to invoke the fallacy of the slippery slope by name.
      • That was sarcasm insufficiently clever to be wit. I agree that the "slippery slope" tactic fails classical deductive reasoning. Unfortunately the slippery slope seems sadly to be how everything has been progressing for the past 80 years or so.

  • best use of their time? (Score:4, Insightful)

    by frovingslosh ( 582462 ) on Friday June 28, 2002 @10:17PM (#3790447)
    We can't get our gub'mint to outlaw spam, but they can spend their time telling search engines how to do business! Sure, I think this info should be disclosed too, but on a priority basis there are a lot of other things I would rather see the effort spent on, and I'm not sure what legal basis they have to tell a site how to present links.

    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.

  • Where are going this way?

  • What about other types of "search"? (Score:5, Interesting)

    by callott ( 306608 ) on Friday June 28, 2002 @10:33PM (#3790500)
    One of the major online travel sites will quite happily skew "lowest fare" flight search results towards a certain airline as long as said airline is willing to pay them a modest monthly fee. (I'm not going to say which one.)

    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
  • Way to go, Google!

    ttyl
    Farrell

  • bbc tour of googleplex on radio tonight (Score:1, Informative)

    by 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... (Score:2, Informative)

    by orthogonal ( 588627 )
    ... 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.

  • Gesuntheit (Score:1, Funny)

    by Anonymous Coward
    *cough* Yahoo *cough*
  • TV is already required to disclose paid advertisements why should the web be any different ?
  • It would be good if the FTC succeeds in forcing search engines to disclose payola links.

    What would be even better is if all print and electronic media were forced to disclose when they are paid to feature certain products, companies, songs etc.

    It's about time media corruption in general got cleaned up.
  • Search Engines Should Indicate Page Merit...

    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.

  • Re: (Score:2, Insightful)

    by account_deleted ( 4530225 )
    Comment removed based on user account deletion
    • The problem here is when you type "unsafe sex" and a pr0n site comes up, coz they paid. Or you type "Leftist politics" and a Right-wing hate site comes up. Or you type "math" and a site about dogs and cats comes up, coz they paid...

      It is not about right to cleanliness...
      Irrelevance and Inappropriety - who decides?
      And more importantly, who advises the end user?
      ~!Q
    • If I go to a search engine and type in "cars" and Ford comes up before Chevy because they paid the search engine money for that placement, why should I be angry? I still got search results for my "cars" search didn't I?
      What if you searched for "cars" and the first page of results was all stuff like autobytel.com, autotrader.com, eBay Motors, and local car dealerships from 10 different cities that weren't local to you? What if you searched for "divx player" and instead of getting a link to the DivX site, all you got were links to "Copy Your Favorite Movies To DVD With Our Software Only $49.99!" scams? You and I would realize right away that the search engine was tilted, but that's because we know better. There are plenty of people who don't (see: Publisher's Clearing House) and laws exist to protect those people.

      Bogus search engines seem to be a growing phenomenon, as people try to cash in on pay-per-click models, and the average luser is going to have a tough time telling the real ones from the fakes. There's a company called Ultimate Search whose sole business model is to buy up expired domains and turn them into cutesy looking so-called search engines. They capitalize off the existing traffic of people who forgot to renew their domains, which can cause confusion; visitors might think that their favorite site is endorsing (or has become) a search engine.

      I don't like the idea of the government regulating the internet, but I don't think that's what this is about. This is about regulating businesses who happen to be on the internet, using existing principles like full disclosure and truth in advertising. Though I'm not sure how much good it'll do in the long run: Ultimate Search is already based in Hong Kong, surely it won't be long until those targeted by the FTC move offshore.

      Shaun

  • Deceptive advertising? (Score:4, Insightful)

    by Animats ( 122034 ) on Saturday June 29, 2002 @02:54AM (#3791107) Homepage
    The FTC is charged with enforcing a law prohibiting "deceptive advertising". Figuring out what that means can be tough, but over the decades, a broad range of scams have been tried, and there's a general consensus on what "deceptive advertising" means. Today, most deceptive advertising charges are brought against advertisers who are being blatantly deceptive. The FTC isn't that aggressive as a consumer-protection agency.

    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.

  • If search engines are more like yellow pages then they cleary should follow its rules.

    But they couldcreate a fair and consistent and also reliable rate system so users could relate theirs experience on the search.

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