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FTC warns Google, Yahoo and Bing to improve labelling of paid ads

The Federal Trade Commission has penned letters to top search firms like Google, Yahoo, and Microsoft, urging them to make sure that their search results clearly distinguish between paid and natural search results.

"We have observed a decline in compliance" with guidelines that the agency issued in 2002, which required search engines to "clearly and prominently distinguish ... advertising from natural search results," Mary K Engle, the FTC's associate director for advertising practices, wrote to the companies.

Given the "changes in digital media" since 2002, the FTC this week issued revised guidelines that search engines like AOL,, Bing, Blekko, DuckDuckGo, Google, and Yahoo should take under advisement.

"The updated guidance emphasizes the need for visual cues, labels, or other techniques to effectively distinguish advertisements, in order to avoid misleading consumers, and it makes recommendations for ensuring that disclosures commonly used to identify advertising are noticeable and understandable to consumers," the FTC said in a statement.

Advances in search over the last decade or so means that, in some cases, it is no longer clear which returns are natural and which are sponsored, the FTC said. "Sometimes the results returned as part of a specialized search are based at least in part on payments from a third party," the agency said. "If that is the case, it is also a form of advertising and should be identified as such to consumers."

Search engines must employ visual cues - like shading or borders - or text labels to alert users that they are seeing an ad, the FTC said.

The agency did not call out any particular search engine for behaviour it finds unacceptable, but warned all search engines in general "to review your websites or other methods of displaying search results, including your use of specialized search, and make any necessary adjustments to ensure you clearly and prominently disclose any advertising."

"Clear labeling and disclosure of paid results is important, and we've always strived to do that as our products have evolved," a Google spokeswoman said in a statement.

"We have received a letter from the FTC today regarding search engine advertising disclosures," a Microsoft spokeswoman responded. "This is an important issue to the industry and we take our role in it as a search leader very seriously. We look forward to analyzing the FTC guidance and working to ensure consumers can continue to trust Bing for their search needs."

"We are committed to providing a clear and transparent search experience for our users," Yahoo said. "We welcome the FTC's guidance and are in the process of further reviewing it."

Google faced an FTC inquiry over its search practices that kicked off in 2011, but in a January 2013 decision, the FTC did not find that Google unfairly manipulated its search results to highlight its own products and demote competing firms.