Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: FTC staff offers guidance to search engine operators on labeling ads, (Jun 25, 2013)

By Jeffrey May, J.D.

Today, the FTC Bureau of Consumer Protection staff sent letters to general purpose search engine companies—including Ask.com, Bing, Blekko, DuckDuckGo, Google, and Yahoo!, as well as 17 of the most heavily trafficked specialized search engines—advising the companies to adjust their websites if necessary to assist consumers in distinguishing between advertising and natural search results.

In a 2002 letter, the Bureau of Consumer Protection staff warned search engines about the potential for Section 5 liability where consumers are deceived because natural search results are not clearly and prominently distinguished from advertising. Although search engines seemingly embraced the letter’s advice and distinguished paid search results or other advertising on their websites, the staff recently has observed a decline in compliance with the letter’s guidance.

According to the staff letters sent to general search engines, while any method for clearly and prominently distinguishing advertising from natural search results is permissible, any labels and visual cues used must be noticeable and understandable to consumers.

With respect to the use of visual cues, such as background shading, to distinguish advertising results, the staff calls for “sufficient luminosity.” The staff recommends that in distinguishing any top ads or other advertising results integrated into the natural search results, search engines should use:

1. More prominent shading that has a clear outline;

2. A prominent border that distinctly sets off advertising from the natural search results; or

3. Both prominent shading and a border.

When using text labels to distinguish advertising results, search engines should utilize a text label that:

1. Uses language that explicitly and unambiguously conveys if a search result is advertising;

2. Is large and visible enough for consumers to notice it; and

3. Is located near the search result (or group of search results) that it qualifies and where consumers will see it.

In addition, search engines should consider placing any text label used to distinguish advertising results immediately in front of an advertising result, or in the upper-left hand corner of an ad block, including any grouping of paid specialized results, in adequately sized and colored font.

New search platforms.

Noting that online search continues to evolve, the staff recognizes that flexibility is required in developing the most effective methods for clearly and prominently differentiating advertising from other information. However, the principle of making advertising distinguishable from natural results remains applicable whatever form the search takes. As an example, the staff suggests that, if a social network were to stream recommended restaurants based on what a particular consumer’s social contacts had enjoyed, it should clearly distinguish as advertising any information feeds included or prioritized based in whole or in part on payments from a third party.

According to the FTC announcement of the staff letters, these recommendations respond to requests from industry and consumer organizations to update the 2002 guidance.

News: Advertising ConsumerProtection FederalTradeCommissionNews