FTC Tells Sites to Mark Paid Listings

The Federal Trade Commission said June 28 that search engine companies must clearly mark paid listings on their sites, giving a clear victory to complainant Commercial Alert, Portland, OR.

Ending an investigation that started in July 2001, the FTC said it soon will send letters on clear disclosure requirements to companies like iWon, LookSmart, Microsoft, AOL Time Warner, Direct Hit Technologies, Terra Lycos and AltaVista Co. It has no immediate plans to take formal action.

Many of these companies under investigation already flag paid listings through various means. According to the FTC, 11 of the 12 search Web sites run by seven search engine firms separate paid-ranking results by placing them above the non-paid results.

Still, the agency found that the paid-listings disclosures are not transparent. Terms used that do not reflect the paid nature of the listings include “search partners,” “start here,” “featured listings,” “recommended sites,” “premier listings,” “partner search results,” “spotlight,” “news,” “resources” or “products and services.”

Commercial Alert thinks that the increased popularity of paid listings will undermine editorial integrity on the Internet.

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