FTC Upholds Nader’s Cavil About Websites’ Covert Sponsorship

03 July 2002

A complaint lodged a year ago by Commercial Alert, a consumer group co-founded by veteran campaigner Ralph Nader, has been upheld by the Federal Trade Commission.

CA had protested the practice by certain website operators of accepting covert sponsorship of their search engines, rigged to ensure that sponsors’ details feature prominently among web search results.

The FTC’s ensuing investigation uncovered, it said, a number of questionable practices and it will now write to the companies concerned “outlining the need for clear and conspicuous disclosures of paid placement, and in some instances paid inclusion, so that businesses may avoid possible future commission action.”

On the FTC’s admonitory mailing list are AltaVista, AOL Time Warner, iWon.com, Looksmart, Microsoft, Terra Lycos and Direct Hit (now part of Teoma).

Said CA executive director Gary Ruskin: “People don't understand the obfuscatory terms that are used to describe ads in search engine results. We hope that when search engines disclose when ads are ads, then search engine users will flee those engines that have no editorial integrity.”

One notable exception, Ruskin says, is Google which already appears to conform to the guidelines outlined in the FTC’s letter.

Data sourced from: New York Times; additional content by WARC staff