A Letter To The FTC Regarding Search Engine Disclosure Compliance

In 2002, the US Federal Trade Commission created guidelines on how search engines should disclose paid placement and paid inclusion listings. It’s become clear to me over the past two weeks that the search engine industry has either largely forgotten these guidelines or is ignoring them. That’s why I’ve written a letter today to the FTC asking that the agency conduct a compliance review, as well as a review to see if its guidelines should be updated. My letter is below.

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US Federal Trade Commission

Attn: Chairman Jon Leibowitz; Bureau of Consumer Protection, Division of Advertising Practices; Office of Public Affairs

Dear Chairman Leibowitz, The Bureau of Consumer Protection & The Office of Public Affairs

In 2002, the US Federal Trade Commission created guidelines for search engines regarding disclosure of paid placement and paid inclusion listings. As a journalist who has covered the search engine space since 1996, I’m finding that the agency seems to be failing to properly enforce these guidelines. I’m asking for the FTC to conduct a review of the current state of compliance, so that I might report on your official findings. I’d also like to understand if the agency, after conducting such a review, feels that the guidelines need to be updated, expanded or amended in any way.

I know the history of how the disclosure guidelines were created well. I was cited in the Commercial Alert complaint that was filed in 2001, which triggered the FTC to conduct its initial review. I reported on both your response to Commercial Alert and the guidelines that came out of that response.

While I’ve never forgotten those guidelines, it appears that the search engines that I cover have. Recently, I wrote about the growth of paid inclusion programs at Google, a company which in the past had fiercely opposed such programs. The FTC didn’t oppose paid inclusion; that was Google’s own choice. But now that Google has adopted paid inclusion, apparently to avoid embarrassment, it gave me its own, new definition of paid inclusion:

Paid inclusion has historically been used to describe results that the website owner paid to place, but which were not labelled differently from organic search results.  We are making it very clear to users that there is a difference between these results for which Google may be compensated by the providers, and our organic search results.

That is not how I recall Google or the search engine industry in general having historically described paid inclusion. It’s not how the FTC itself described it, within its own guidelines. If I’m going to report on paid inclusion and disclosure compliance, I’d like the FTC to reassert its own definition, rather than the largest search engine in the United States unilaterally declaring definitions of its own.

In another example, last Friday, the CEO of Nextag Jeffrey Katz wrote a widely-cited opinion piece in the Wall Street Journal taking Google to task over his belief of a failure of disclosure. Katz wrote in part:

Most people believe that when they type “convection microwave oven” or “biking shorts” into Google, they will receive a list of the most relevant sites. Not true. That’s how Google used to work. Now, when someone searches for these items, the most prominent results are displayed because companies paid Google for that privilege….

Google needs to be transparent about how its search engine operates. Today Google hides behind forked-tongued gobbledygook that is meant to obfuscate. Google should disclose, clearly and in plain English, when advertisers receive better placement in search results….

In reviewing his opinion piece, I detailed how Nextag itself doesn’t appear to disclose paid inclusion as required by the FTC, guidelines that are applicable to all search engines, as I was told by the FTC as the time they were created

The idea that a CEO could pen a letter about a competitor’s supposed lack of consumer transparency without a concern that his own company doesn’t follow your guidelines suggests that those guidelines either aren’t taken seriously by some in the search engine industry or aren’t considered applicable to them. I’d like the FTC review to address this.

When the guidelines were drafted, the concern was that consumers might not know what was paid for or not within search engines and assume everything was listed without payment being a factor, since that’s how search engines had historically operated. Compliance with paid placement listings generally seems good. But when it comes to paid inclusion, which was always the trickier issue, compliance seems to be poor.

The FTC never addressed the issue of content promotion, what search engines should do when they promote their own content. That might be a new guideline that should be issued and perhaps one essential to the ongoing anti-trust review of Google.

Some Google competitors like to make out that when Google integrates vertical search results that this is somehow unfair favoritism rather than operating as a search engine should operate and despite the fact that competitors may operate the exact same way.

Now that Google is turning former search engines like Google Product Search into paid inclusion/advertising products like Google Shopping, the definitions are even more important — and not just for the handful of competitors claiming an issue with Google but for the millions of consumers that use these search engines sometimes without clear disclosure of why they get certain results.

The commission may also wish to ponder if the guidelines should be extended to hardware and software manufacturers as well as broadband and wireless providers, all of which may cut deals deciding which search engine will be the default on their devices, programs and operating systems. Consumers may not understand that payment was involved in the choice made for them and may find it difficult to impossible to change, such as seems to be the case with the search engines used by default with Google’s Galaxy Nexus phone or Apple’s iPhone 4S.

I understand that the FTC has been mostly involved at late investigating whether consumers are being harmed by possible anti-competitive actions of Google. However, the FTC also has a role in protecting consumers from misleading and confusing advertising across all search engines. A review of your guidelines would be especially helpful given changes in the space now and perhaps necessary for any proper anti-trust review you’re doing.

I would be happy to speak further with anyone from the commission on this matter.

Danny Sullivan, Editor In Chief, Search Engine Land

Appendix

Below is a small appendix designed to better illustrate some of the complexities and the current situation of paid placement and paid inclusion disclosure. It’s based on a light review of some of the major general purpose search engines in the United States, some selected vertical search engines that are member companies of FairSearch, which espouses that consumers benefit when search engines are “displaying results transparently,” and Nextag.

Google: The company generally seems to label its paid placement ads and keeps them distinct from editorial content. Depending on the monitor you use, the color used to highlight and separate ads from editorial content might be hard to discern (as is the case for me with a 2010 MacBook Pro, while on a 2011 MacBook Air, they are very distinct).

Paid inclusion is disclosed through new Sponsored boxes. However, people might go directly to the vertical search engines that power these boxes, where disclosure might be lacking. For more on this, see Once Deemed Evil, Google Now Embraces Paid Inclusion.

The company has deals to distribute its search results by partnering with browser vendors, hardware manufacturers, broadband and wireless providers. These might fail to disclose why Google was made a choice or that they receive money because of this.

Bing: The service generally seems to label its paid placement ads and keeps them distinct from editorial content. Depending on the monitor you use, the color used to highlight and separate ads from editorial content might be hard to discern (as is the case for me with a 2010 MacBook Pro, while on a 2011 MacBook Air, they are very distinct).

Paid inclusion is not disclosed inline with the main search results at times. For example, a search for “dvd players” brings up a shopping box with nothing explaining that some vendors may appear because they’ve paid for inclusion.

Using the Bing Shopping site directly, the results also lack any disclosure. The Help page simply says: “Shopping around online has never been easier! Search for popular products at online stores, and learn instantly who has the lowest price.” But the page designed for merchants (rather than consumers) explains that getting listed through Bing’s partnership with Shopping.com means “Paid offers will be highlighted throughout Bing Shopping, including search result and product pages.”

The service has deals to distribute its search results by partnering with browser vendors, hardware manufacturers, broadband and wireless providers. These might fail to disclose why Bing was made a choice or that they receive money because of this.

Yahoo:  The service generally seems to label its paid placement ads and keeps them distinct from editorial content. Depending on the monitor you use, the color used to highlight and separate ads from editorial content might be hard to discern (as is the case for me with a 2010 MacBook Pro, while on a 2011 MacBook Air, they are very distinct).

Paid inclusion is not disclosed inline with the main search results at times. For example, a search for “dvd players” brings up a shopping box with nothing explaining that some vendors may appear because they’ve paid for inclusion.

Using the Yahoo Shopping site directly, the home page simply says “Information about prices, products, services and merchants is provided by third parties and is for informational purposes only. Yahoo! does not represent or warrant the accuracy or reliability of the information, and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use.”

The main help pages talking about Yahoo Shopping explain nothing about possible paid inclusion, simply saying, for example, “Yahoo! Shopping Search helps you find the right product at the right price by giving them the most relevant product listings for a keyword query. Our search enables you to find millions of items from thousands of merchants, so you can locate, compare, and buy just about anything.”

One help page about “Product Pages” within the service does say, “Product Pages generally include merchants that are affiliated with Yahoo! Shopping or have other financial relationships with Yahoo!. In addition, merchants with their logo displayed or with their name in bold text appears higher in the comparison grid because they’ve paid for enhanced placement.” The page for merchants seems to indicate that Yahoo Shopping operates on a paid inclusion basis.

Yahoo has deals to distribute its search results by partnering with browser vendors, hardware manufacturers, broadband and wireless providers, among others. These might fail to disclose why Yahoo was made a choice or that they receive money because of this.

Ask:  The service generally seems to label its paid placement ads and keeps them distinct from editorial content. Depending on the monitor you use, the color used to highlight and separate ads from editorial content might be hard to discern (as is the case for me on both a 2010 MacBook Pro and on a 2011 MacBook Air).

Paid inclusion is not disclosed inline with the main search results at times. For example, a search for “dvd players” brings up a a “Amazon.com results” box that is probably appearing because of a paid inclusion deal with Amazon.

A “Shopping results” box from Ask itself appears at the top of the page, with nothing explaining that some vendors may appear because they’ve paid for inclusion. Using the Ask Shopping site directly, the home page has no disclosure information, nor does the help page immediately reveal any. In fact, nothing I can find even explains to merchants that paid inclusion listing come from Pronto.com, which is owned by Ask’s parent, IAC.

Ask has deals to distribute its search results in a variety of ways. These might fail to disclose why Ask was made a choice or that they receive money because of this.

Nextag: See Given Nextag’s Lack Of Transparency, Its WSJ Opinion Piece Asking For Google Transparency Isn’t Wise for a detailed review about how Nextag seems to fail to provide proper paid inclusion disclosure.

Twenga: The service generally seems to label its paid placement ads and keeps them distinct from editorial content.

The company doesn’t appear to use paid inclusion, and the help page is very clear about this saying:

“The offers from every online shop listed by Twenga are catalogued completely objectively. They are organised by product category, price, brand and by other details specified by you, the user. When you search for a product, the offers that match your keywords are displayed [sic] n order of popularity by default, but you can easily sort your results by relevance and price (high or low). In every instance, the search results are based on the criteria of Twenga users, which is why we call it organic listing.”

It also says:

“Twenga relies on advertising and business partnerships which give interested companies and retailers greater visibility than that provided by organic listing. Advertisements and sponsored links appear in designated areas, clearly separate from other results. Any commercial link Twenga may have with a merchant does not affect its position in the database nor in the natural search results.”

TripAdvisor: ”Sponsored links” seems to be the label used for some paid placement ads, and these are kept distinct from editorial content. However, TripAdvisor has a variety of ad units that might not make clear that these are ads, such as “Special Offers” that are only special to the degree that someone can pay to “appear at the top of your area’s list of accommodations, regardless of your actual TripAdvisor ranking — giving you the edge over local competition.”

Paid inclusion seems likely at TripAdvisor, but it’s hard to discern if it’s happening. The home page has text at the bottom saying merely: “TripAdvisor® features reviews and advice on hotels, resorts, flights, vacation rentals, vacation packages, travel guides, and lots more.” There’s also text to reassure consumers that they aren’t charged for using it but not explaining that TripAdvisor may receive paid inclusion fees: “TripAdvisor LLC is not a booking agent and does not charge any service fees to users of our site. The main help area lacks any disclosure.

Related Reading

The articles below have more information on some of the topics I’ve addressed, which I believe would be especially useful for those at the commission trying to make decisions about both competitive issues and consumer disclosure.

Related Topics: Channel: Industry | Features: Analysis | Google: Antitrust | Legal | Legal: Regulation | Top News

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About The Author: is a Founding Editor of Search Engine Land. He’s a widely cited authority on search engines and search marketing issues who has covered the space since 1996. Danny also serves as Chief Content Officer for Third Door Media, which publishes Search Engine Land and produces the SMX: Search Marketing Expo conference series. He has a personal blog called Daggle (and keeps his disclosures page there). He can be found on Facebook, Google + and microblogs on Twitter as @dannysullivan.

Connect with the author via: Email | Twitter | Google+ | LinkedIn



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  • johndxx

     Danny,

    Here’s a newsflash: Youtube videos in search are paid placement. Shopping results are paid placement. When a search engine lists its own results, usually prominently, this is paid placement as their paying themselves.

    They’re not using relevancy or authority -  which is why while content farms hit by Panda, Youtube actually got a bump (the serps today are riddled with Youtube videos, often spammy ones) – but what benefits themselves.

    There should be regulation of ALL search engines to make them stop showing their own results. Otherwise, they’re not doing what they say they are and are in fact lying to their searchers.

    It’s like being a judge on a case in which you have a financial stake. You need to recuse yourself. It cannot be any other way.

    The fact that you’re only now talking about paid placement is a bit funny. Google serps have long been filled with it (the paying yourself kind).

  • http://searchengineland.com/ Danny Sullivan

    John, that’s actually something I asked the FTC to determine. When it looked at these issues eight years ago (they existed then), it chose not to view such thinks as paid placements that required disclosure. I mentioned this in my letter. It’s nothing new to me, and I’m not “only now” just talking about it. 

    There’s also some practical difficulties. If you require search engines to show none of their own results, then they can’t even show web results and instead would show listings leading to results from other search engines. There are good reasons why general purpose search engines should show vertical search results from across the web (Google & Google Video). There are conflicts that continue to arise when search engines also publish content (Google & YouTube). Maybe the FTC will take a fresh look.

  • johndxx

    Danny,

    You said it’s foolish to investigate Google for behaving like a search engine. I don’t think that this is how a search engine should behave.

    A search engine is, or should be, an impartial judge. No one is guaranteed a ranking and the algorithm is the SE’s business (for the most part). If an engine starts showing off its own results, then impartiality goes out the window. No one has to prove it. It’s taken for granted that this is what the search engine will do because this is what a for profit organization does.

    Again, I mention how judge need to recuse themselves. No one has to prove that they’re biased. It’s taken for granted that this can and will happen and the entire reputation of the system depends on it.

    A search engine should live by the ads that appear along with organic results. It should not list its own content in the organic results, because it has an incentive to do so.

    Why do you think Serps are so full of Youtube vids these days. Do you imagine this would be the case if Google did not own Youtube? No chance. I’m seeing 30 seconds slide videos appearing on the first page. Plenty of them.

    This is not just true for Google. It should be an industry wide standard. An engine can’t list their own “organic” results, because there is no such thing.

    If the user needs to click once again to reach a flight or hotel search engine (or something of the sort), at least they know that they’re getting the best results.

  • Lyndon NA

    @johndxx:disqus sorry, but I have to disagree a wee bit there.
    If the best “natural” and “organic” result happens to be owned by the same company showing the results – then it should be included.
    I see nothing dangerous nor wrong about it.

    The question is – is it really natural/organic, or is it biased?

    They need to be examined.
    Once it is ascertained that the results are “natural”, then things should be fine, and they can continue to show “the best” result, regardless of origin or ownership.

  • Lyndon NA

    @Danny Sullivan
    Aside from the Paid Inclusion faff … what else is there you think G should be examined for?

    Do you think some of their recent exploits is cause to put them under the microscope?
    Have they lost sufficient face/trust that people should be double checking them?

    Do you, personally, think they are above-board, on the level and being “neutral” in the results they serve?

    I may have my issues with G Corp … but I am having issues with the concept of them doing something as stupid as “cheating” in their own game, due to the size of the risk of loss.

  • http://twitter.com/helproi ZeeShan

    Bravo Danny! I really appreciate your effort on the behalf of all the consumers and customers across the Globe. We are the one, who strenghtened the ‘ Search Giant ‘, We all made his ‘ Search Giant ‘, Lets Not be to be blackmailed by the fear of De-Indexed.

  • Pat Grady

    I like instigators, especially in journalism!  Go Danny!  Unfettered journalism remains our greatest safety net against abuse, intended or otherwise, of any form, from any source.

  • http://searchengineland.com/ Danny Sullivan

    A vertical search engine carries results from across the web, just as a web search engine carries search results from across the web. If you fail to understand this important point, I can’t help you understand more. Assuming you get that, then….
    It’s foolish to investigate any search engine for having a vertical search engine that’s designed to help people find stuff. So investigating Google for running Google News, as opposed to pointing to Yahoo News? That’s like saying the Wall Street Journal should be investigated for not carrying the sports section of the New York Times. Vertical search is search; it’s like investigating a search engine for listing search listings.

    It’s an entirely different thing when you ask if the search results are dominated by content published by the search engine itself. YouTube is not designed to be a video search engine carrying results from across the web. That’s why Google Video exists. It’s not wrong to list YouTube content in either Google or Google Video. It’s not even surprising that you’d get so much of it, given how big YouTube is. But there is an inherent conflict that Google faces — that several search engines face — when they publish their own information that in turn appears within their various search engines.

    That’s an important distinction, and it’s also something I’ve written about in detail. Read the “To Understand Google Favoritism, Think “If Google+ Were YouTube”” post that I listed under the related resources.

  • http://searchengineland.com/ Danny Sullivan

    I think the degree to which any company that runs a search engine also acts as a publisher, there are conflicts that perhaps need to be considered. With Google, the anti-trust stuff to me seems strongest when it pushes non-search stuff like Google+ into the results. That’s more a sense of propping up another product with search dominance, although there are also some excellent arguments as to why Google+ is also a search product. But really, I’d say look at the first three articles in my related articles list for examples of where Google closes the loop because of a broad-amount of dominance that to me carries far more concerns than what some of the vertical search engines argue against it.

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  • http://twitter.com/20milproductos Material de Oficina

    Yo como especialista del mundo digital y socio de un ecommerce de venta de  papeleria on line creo que hay que volver al principio: diseñar una pagina con buen conteido y una estructura Editorial x niveles y, en segundo paso, que tenga vida, es ecir, actividad, cambios, mejoras etc

  • Lyndon NA

    It’s a tough call at times.

    Personally – I think they stepped over the line on a few counts.
    The immediate two that leap to mind is what I view as being a little ‘dishonest’ and possibly even misrepresenting in regards to the paid inclusion stuff,
    and the G+ post inclusion.

    For the former – they could have easily included a little warning or such.
    They suggest we do the same for “adverts”, so why not implement a similar warning themselves?

    For the latter … I did a search for [Cheese], and got hit by people like Andrew Shotland, Sasch Mayer and John Mueller.
    The simple reason being – despite them having nothing to do with Cheese, I interact with them on G+, and they made a few comments on a post about Cheese!
    That’s plain wrong.

    At the end of the day – some of the things that people call “favouritism” is plain old fashioned popularity.
    In other instances, that “favourtism” is because it is the best result to return.
    Yet in a few cases … I am left wondering if G should infact be made to dump some of its products onto external Domains.  Maybe if things existed outside the “google.com” domain, they wouldn’t have quite so much presence?

  • Terri Kash

    My strong opinion is that Google is pushing organic results further and further down the page and focusing most of their results pages to paid listings/ads. While we (our small business) ranks on the first page locally for our key search words – our small business is feeling more and more pressure to buy adwords or work with some of the advertising providers like Yodle – which is very expensive (we have had less than helpful results doing this) and I believe dilutes our own footprint on the internet. Another problem I see is that the directory listing are taking up a huge chunk of the organic listings also putting pressure on small business to pay for premium inclusion and placement in the directory listings.

    Google and others are less than neutral parties in providing relevant search results, and I agree that depending on your monitor a user may or may not be aware what is or is not a paid placement, Distinctly labeling paid advertising areas should be required. Honestly, the quality of  the potential customer is much higher from organic search result clicks and I am not thrilled that small business is slowly being forced of natural results on the first page by paid results and directories.

    When I am searching for information I go straight for organic results and the information I get from those sites is much more relevant to my information needs than the paid placement results.

    I would add that people are so “over SEO’ing” their sites that the result is gobelty gook content in some cases and it is obviously written for a machine to read and rank rather than providing valuable, quality content.

    It is really difficult for a small business to keep their site ranked decently and create quality content – Google and others are not helping millions of small businesses who just want to be ranked fairly.

  • johndxx

    Hi Lyndon,

    I can’t ever prove that a result is not “natural”. No one can.

    I bring again the example of a judge (which is what a search engine should be). If a judge knows a party to a trial he or she need to recuse themselves. If they didn’t, then it is ground for a mistrial or appeal. I don’t have to prove that they did anything wrong. If they have a financial stake in the case, then even if their ruling made sense, it is null and void.

    The same goes with Google. They are a judge. The organic results are supposed to be unbiased. They cannot be unbiased if they have a stake in them.

    Of course it’s dangerous because it kills competition, innovation, and growth. It also reduces the need for SEOs because less organic results are available and it’s known that the judge is squeezing other players out.

    I urge you to look at how much Youtube is dominating serps. Do you think that Youtube would appear as much if it weren’t owned by Google? Not a chance.

    As to how general vs. vertical engines work, I do know what you mean, Danny. Theoretically, it should have been fine. Unfortunately, as with many other businesses, once you give corporations and inch, they try to take an arm, a leg, and other body parts too. Google has simply become too greedy, which is why the serps look like a badly done brochure.

    It would have been more credible not to show any of your own results in the organic section of the serps. At the end of the day, a search engine should not be a content provider because it develops a conflict of interest, just like a bank which profits when its customers lose.

    As to the NYtimes example, it is irrelevant. The NYtimes is not a search engine and doesn’t claim to list everything on their paper or site according to unbiased relevance.

  • johndxx

    Terri,

    It’s because the organic results are less organic than they used to. Google is now squeezing the lemon of their engine dry. It has little other choice. It has to keep showing growth. This is why YouTube is the new content farm where spam thrives.

    Go to Duck Duck Go and tell me which engine provides a better user experience: Google or DDG?

    By the way, a few years ago Google used to be this way, but they’ve just become too greedy.

  • Lyndon NA

    Okay – I’ve rewritten this multiple times now.
    The reason being – I’m conflicting.

    So, I’ll have to go with the only real way I know … blunt :D

    Google can pretty much say and do as they please – so long as they are open/clear about it.
    If they want to take money to list people in first place – they are freely entitled to do so.
    If they want to put any of their stuff tops, or all over page1 – they can do so.
    If they want to blacklist certain sites, people, places or terms – they are allowed to.
    So long as they let people know that sort of thing may be happening – and the SERPs may not be 100% natural, organic and honest.

    You see – they aren’t really regulated as a Search Engine.
    They may be for Advertising etc.
    They may be for misrepresenting etc.
    But not as a Search Engine – as there is no-one to regulate them, and to be honest, I don’t see how anyone could.

    So we are left with, well … trust, or the lack thereof.

    A year or so ago (even after being booted as a TC), I would have said “yes”.
    I’ve seen and heard enough since to put a dent in that trust.
    The crying shame is – I’ve never like Google Corp.  Never.
    But I held them with a little respect.
    I had some trust.
    Now … not so much.

    So long as they are open, honest and accurate – they can keep on as they are.
    The question is – can they do it?

  • http://www.webstatsart.com/ Webstats Art

    Google is a lucky scraper site that made enough money to buy a satellite. There is money in scraping and copying but the rules are that you must scrape before anyone else. Now it is too late for anyone else. What a pity.

  • Juanita W. Profit

    intended or otherwise, of any form, from any source. http://GooleByGetJob2012.notlong.com 

  • johndxx

     Lyndon,
    I accept what you’re saying and, to a degree, I agree with you. However, there are regulations for all sorts of businesses and Search can certainly become one of them. There are also rules against monopolies which may not seem like “open market”, but are there to protect society at large and preserve competition.

    Now, as to what Google is doing (and other companies would have done in their position of strength), is to basically cancel the organic results, either by hardly showing them (above the fold) or by stuffing it with their “organic” services.

    They found the magic formula for doing so:

    1. Create an obscure algorithm update and name it after a cute animal.

    2. Test to make sure that this update increases your bottom line.

    3. Say that it is used to fight spam and tarnish the reputation of many sites in the process.

    4. Clear away competition from the SERPS and increase exposure to your own services, whether good ones or bad.

    I do think that there is room for regulation as there once was against banks (before the market crashed due to the cancellation of these limitations).

    You can’t be a search engine if you show your own results. Now, either define yourself as something else, clearly mark all of your own results as ads, and openly state that you’re not in the business of fairly ranking websites any longer. Be honest about your business.

    It’s time that SEL and other big search blogs clearly stated this and supported the call for regulation and limits to what Google and other engines are doing.

  • JoaquinS

    Danny,

    That is the reality, the public in general would not even notice that the top three listings are even Ads. They just automatically click the first links they see without even thinking they are advertisements.

    Correct me if I’m wrong, but you have noticed that the background color highlighting the Ad placements is hardly noticeable anymore. I truly believe that search engines are not what they used to be, but seem to be full of useless clutter which is pushing organic listings in farther reach from the general public. I classify that as being on the deceptive side and need to be more transparent in notifying the public what is organic and what is an Ad.

    It’s great to see you pushing for more transparency Danny, well done!

  • http://reelseo.com/about/grant Grant Crowell

    When it comes to paid inclusion disclosure, I’d also like to see blog hubs (including search-related and other marketing publications), disclose which non-staff contributors are getting paid for their submissions; or have been compensated by the publisher or parent company in other projects or events — financial or otherwise. (This can also include being paid to speak at the parent company’s conferences, workshops, or other events.) CMP.LY has a good set of graphic tags that can clearly distinguish those kind of professional relationships.
    I’m not suggesting SearchEngineLand and it’s parent company Third Door Media are not practicing proper disclosure or aren’t already in full compliance with existing FTC guidelines. I’m just saying the paid inclusion issue goes beyond just search results; it is especially a problem with paid 3rd-party bloggers where their compensation arrangements aren’t properly disclosed to unaware consumers who are influenced by their content (and especially any endorsements). I’ve worked at a few search marketing publications in the past during the 2002-present phase where I was a freelance contributor getting paid for my work, but it was never disclosed by the publisher. Even more egregious, some editors decided to insert their own content after-the-fact, making it seem like I was endorsing their parent company’s own vendor solutions. (I certainly know that to be a serious FTC violation.)

    The big problem I think this article is voicing is that laws are only as good as our ability to enforce it. We depend on the FTC to be a watchdog, an advocate, a listener and responder, and an enforcer. Yet I personally have no idea how someone like myself could ever report a violation, nor do I have any confidence that the FTC would give my complaint the attention it would deserve. Is this due to a lack of resources? Other priorities? A lack of effective communication of existing policies? Or just having their hands tied?

    I am glad that Danny Sullivan is continuing to bringing up this issue. When content is becoming increasingly prolific, trust is becoming the rarified commodity. That trust between the consumer and the business can only be realized with full disclosure of work relationships, and an assurance that the FTC will be there to guide and enforce it. 

  • http://www.socialstrategy.co.uk/ Terence Milbourn

    When Google went public, it warned shareholders very specifically about its aversion to evil. It specifically highlighted paid shopping listings as an example of something it would not do.

    Nowadays, it’s getting paid to sell airline tickets and hotel rooms and, yes, products in the space it used to reserve for unpaid search results.

    Google is a fundamentally different company than it has been in the past. Its culture and direction have changed radically in the past 18 months. It is trying to maneuver into position to operate in a post-pc, post-Web world, reacting to what it perceives as threats, and moving to where it thinks the ball will be.

    Google may not be a utility, but search is a very utility-like service. Search is what Google was built on, and why people go to Google in the first place. And when Google rolled out its newest iteration of search — Search Plus your World (SPYW) — people reacted to it like viewing a turd in a punch-bowl.

    There’s a good reason for that revulsion: SPYW is a mess.

    In trying to deliver personalized results, Google polluted the page with its own inferior products (like Google+ instead of Twitter, Google Places instead of Yelp) while banishing competitors to lower listings in the results. Ads are everywhere. The People and Pages sidebar that now appears in search results is particularly galling. It is the ultimate subversion of Google to a commercial end.

    Basically, it’s an enormous ad for Google’s other products, hogging your screen.

    It’s hard to understand how Google could screw up its core product like that. But there’s a remarkably simple explanation: Search is no longer Google’s core product.

    Europe began looking into Google’s search results in November of 2010, after Microsoft and other smaller firms complained that the U.S.-based search giant was giving its own products a higher-than-natural ranking in web searches while decreasing the rank of competitors’ services. Google has been fighting hard against the antitrust claims.

    The European Commission is giving Google a “matter of weeks” to settle an ongoing antitrust case by changing several of its business practices which some say have given the company an unfair monopolistic advantage on the web.

    Europe began looking into Google’s search results in November of 2010, after Microsoft and other smaller firms complained Google was giving its own products a higher-than-natural ranking in web searches while decreasing the rank of competitors’ services.

    The Commission specified four areas where Google must change in order to avoid financial penalties in a letter they sent to Google executive chairman Eric Schmidt:

    1. Google’s displaying of links to its own specific search products, such as Google News, in general search results, which the Commission argues reduces competition.

    2. Google’s taking of content, such as restaurant reviews from other services, for its own products, which the Commission believes might reduce the creation of original content on the web.

    3. Google’s exclusive advertising deals with partners, which the Commission worries unfairly squeezes out Google’s competition.

    4. Google’s limitation on data being transferred from AdWords to competitors’ services, which the Commission said limits software developers’ ability to create products that utilize cross-platform search advertising.

    If Google refuses to comply, the Commission could slap Google with antitrust charges and, eventually, fines.

    The bottom line: People don’t trust Google with their search results now.

    And that IS new.

  • d_a_t

    It’s a two sided market, just like television. As long as users aren’t turned off by all the ads, then there’s really no harm being done to them. And if advertisers are making money off of their ads, there’s really no harm being done to them either. Some business won’t be able to make money off search ads, just like there are many businesses that can’t afford to advertise their business on television. It’s a shame not every one can be a winner but that’s how it works.

  • http://twitter.com/compnski Jason

    Do you consider amazon search paid placement? Companies pay to have amazon sell their product alongside Amazons. They are the biggest product search engine I use.

  • http://twitter.com/DavidJo45324615 David Johnstone

     100% agree.  youtube is not a “vertical” as Danny S points out, yet youtube features so heavily in the Google organic SERPs – WHY, WHY, WHY? As you said before, would youtube feature so heavily in the SERPs if Google didn’t own youtube? NO.  Not a hope or a prayer. I mean, imagine if Apple bought youtube? Google would bury youtube if that was the case.  Google+, Google Shopping (which will become 100% paid), these are products of Google tainting Google SERPs. 

    I hope Google get slapped heavily on July 2nd by the European Commission – who are asking for Google to make their SERPs more fair.

  • http://twitter.com/DavidJo45324615 David Johnstone

    That’s how I feel.  From a small business point of view, this almost feels like the “end of days” if Google can get away with being the dominant traffic controller AND doing as they please. 

  • http://twitter.com/DavidJo45324615 David Johnstone

    Google are hoarding traffic for themselves more and more – driving us from one Google product to another, always ensuring the most prominent navigation options are ads.

    What we are witnessing since 2011 is a company playing every card it can to squeeze every last red cent out of their cash cow (Adwords).  You can bet Google didn’t want to go into desperation mode, but they have had to do it because of shareholder pressure and the need to grow and grow and grow and grow – with only one chief revenue stream. 

    Now we’re at the point that Google are becoming a surly intermediator, obstructing business online – basically – GETTING IN THE WAY and I would argue, hurting economies due to their dominance and control over internet traffic.  I hope the EC come down hard on Google.

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  • http://searchengineland.com/ Danny Sullivan

    I haven’t, because I haven’t generally considered Amazon to be a search engine but rather a marketplace/store.

  • http://searchengineland.com/ Danny Sullivan

    Paid inclusion disclosures are specific to the FTC search engine guidelines. There are no such “paid inclusion” disclosures for publications.

    The FTC has guidelines applicable to bloggers “word of mouth” marketers to disclose material connections, when those are deemed appropriate. IE, if you were paid to write about something, you should be disclosing that.

    We don’t really fall under those guidelines, given we’re not the type of blogging publication they’re aimed at. We’re much closer to a newspaper or magazine. That’s not to say there aren’t other guidelines we might fall under. And far more important, regardless of any guidelines, we have internal policies that require that we disclose any material connections that a reader might deem appropriate.

    It mainly comes down to our E-solution Spotlights, which we alert people to below our navigation bar. Content there is written by sponsors. It’s clearly marked that way. We also nofollow or block links, not required by the FTC but something Google demands. We also have occasional Sponsor Message posts that go out on Twitter and lead back to post here on the site. Those are marked as sponsored both in the feed and in the posts; we nofollow or otherwise block those, as well.

    Anyone can report a violation to the FTC through the FTC site.

  • http://www.wedyn.com/2012/06/epub-reader-for-windows-and-mac.html epub

    Why don’t you include Amazon as a search engine? It is the best search engine for goods (in almost all areas except for cars, houses) on the planet and one of the best search engine for entertainment,

  • http://twitter.com/BlogTyrant Blog Tyrant

    @johndxx:disqus  I find this a little confusing. I have videos that rank up the top in Google SERPs based on a bunch of different factors. Those with better relevance, back links, social shares, etc. outrank my other ones. So it seems that Google is displaying these based on merit, not just to promote YouTube. 
    But many of the videos displayed on Google are not directed to YouTube but to external websites. They also show live Tweets which obviously have nothing to do with Google. I’m not really sure I see what you’re saying re: YT.

    Thanks.

  • johndxx

    If YouTube wasn’t owned by Google it would have gone the same way as Ezinearticles and other content farms who were hit by Panda. In addition, I’m seeing Serps with 7 YT videos on the page. This is for general terms. Find me another site with this kind of exposure.

    I’m seeing 30 second videos ranking on page 1, sometimes in positions 1-3. Aaron Wall documented the rise in exposure for YouTube. Some of the videos shown are directed elsewhere, but most of them, the vast majority, go to YouTube.

  • http://twitter.com/mikelitson mike litson

    I have to agree with you entirely on this point Danny and I think it may be a smart idea to start an E Petition of some description so that those who agree can show some support for this line of enquiry. 

  • http://twitter.com/alancperkins Alan Perkins

    Danny, this a great letter. Well done!

  • http://www.socialstrategy.co.uk/ Terence Milbourn

    Very few companies use technology as a core strategy. Amazon is a favorite example. Most people think of Amazon as a bookseller or retailer which happens to sell online. But that’s a misconception.

    Amazon isn’t a “bookseller”. It isn’t even a “retailer”. It’s a business which uses different kinds of technology to create a multitude of profit streams.

    Put simply; Amazon uses technology to sell stuff better than anyone else.  

    To what extent you might or might not want to call the size and scope of their operation an online index or directory for almost anything, that’s debatable. 

    But “Search Engine”?

    Nah, I’m with you Danny.

  • http://www.socialstrategy.co.uk/ Terence Milbourn

    Google must respond by July with regards to the ongoing antitrust investigation by the European Commission for Competition Policy, presenting realistic and workable proposals in order to avoid huge fines, which could potentially be as much as 10% of their annual income. 

    Despite the Commission’s threats, Eric Schmidt remained defiant when commenting about the investigation last month at Google’s Big Tent conference here in Hertfordshire (England). 

    In 2008, EU regulators slapped Microsoft with the Commission’s biggest-ever fine of 899 million euros for delaying changes it had demanded. The record was beaten in 2009 by a 1.06 billion euro fine on chipmaker Intel.  

    Are they now about to slap a $4bn fine on Google?

    Google has boosted its antitrust team in Europe to five lawyers from three in the last two years.  Go figure!

    But disciplinary action could lead to even more damaging than a $4bn fine. An adverse EU decision may spark damages claims in other jurisdictions worldwide. Remember, seven months after the EU announced its investigation, the U.S. Federal Trade Commission (FTC) launched its own probe into Google’s business practices.

    Amit Singhal, Google’s senior VP of Engineering published an extensive blog post on the firm’s Public Policy Blog on Friday, titled “setting the record straight: competition in Search”, in which he attempted to dispell many common claims in relation to accusations of unfair competition.

    Judge for yourself.

    http://googlepublicpolicy.blogspot.co.uk/2012/06/setting-record-straight-competition-in.html

  • d_a_t

    I think “getting in the way” is an interesting way of articulating that Google is providing traffic to websites.

  • http://reelseo.com/about/grant Grant Crowell

    Thank you Danny for your thoughtful response. I understand your position, but I don’t make quite the same distinction regarding paid inclusion disclosures with outsides contributors that have a business relationship. Granted it’s the opposite arrangement of who’s doing the paying, or is providing some material or other kind of compensation or business transaction beyond just a guest article. But my point is that what the search engines are doing with paid inclusion and what a publication like SEL and it’s parent company Third Door Media may be doing are not as silo’d as you might think. 

    Say you have guest contributors who are also speakers at SMX conferences, hosted by your parent company and with a number of sponsors and exhibitors (several of whom I’m been told are involved with backlink programs for their own clients). What if any one of those contributors failed to disclose that kind of relationship? What if they mentioned you or another staff writer at SEL in a positive light, and gave a backlink to one of your own articles or theirs on SEL? Would that not be a gray area of a paid endorsement, even if you didn’t solicit it? This is why I think publications like yours need to expand their disclosure to beyond just advertisers and sponsors, and not treat it as just a search engine issues.

    Regarding the FTC, yes I am actually aware of the complaint process, thank you. However I talked with the direct media liaison at the FTC, Betsy Lordan, and she said the following: The ‘FTC generally does not send a response, and does not resolve individual consumer complaints. But these complaints can help us detect patterns of wrong-doing, and lead to investigations and prosecutions. The FTC enters all complaints it receives into Consumer Sentinel, a secure online database that is used by thousands of civil and criminal law enforcement authorities worldwide.” So what that likely means is most violators are likely overlooked unless there is a large outcry. It also breeds a cynicism with consumers who don’t know who’s being paid to write and for what.

    I believe consumers on publications like this would actually be very appreciate of seeing full disclosure on such business relationships with your non-staff writers. It’s also great way to lead by example when making the call for the FTC to get more involved, and realize how deep the problem is. (Actually, it amazes me that they don’t see it as a cash cow for themselves with the amount of fines they could levvy.)

    By the way, Betsy at the FTC informed me that they have no comment regarding your letter to them published here. I’m hoping they will be willing to say something public on it soon, but it’s going to take more than just decrying a government body’s choice of action or inaction. It’s going to take a concerted effort of publishers to practice self-responsiblity and increased disclosure, and point out those who don’t.

  • http://www.socialstrategy.co.uk/ Terence Milbourn

    Being a monopoly is not in itself illegal. If you developed the position naturally without breaking any laws, there’s no problem.  Some markets tend naturally toward monopoly.  But if you abuse monopoly power to your advantage, then you’re breaking the law and face consequences from the Department of Justice or the Federal Trade Commission.

    With 65 percent of search in the U.S. and over 90 percent in Europe, Google clearly has monopoly power, and they abuse it.

    Last year the Electronic Privacy Information Center (EPIC) sent a letter to the FTC expressing concern that Google’s “subjective, secretive ranking criteria” of video searches on YouTube favored Google’s own material about “privacy over non-Google material that would have ranked higher with the use of objective, transparent criteria.” EPIC’s letter concluded:

    “EPIC respectfully requests that the Commission, as part of its investigation into Google for potential antitrust violations, investigate the extent to which Google’s rankings preference its own content over information that is more newsworthy, more significant, and in fact of greater interest to Internet users. Google’s dominance of the search marketplace should not influence the marketplace of information and ideas to Google’s advantage.”

    Given these obvious examples of Google’s arrogant, anti-competitive and self-serving behavior, the announcement of a reported $125 million deal to buy the restaurant reviewer, Zagat, must raise further concerns.

    My own view is that, as Google moves further away from its stated aims, falsifies its search results to its own obvious benefit, and by defenition, becomes less and less relevant to the searcher’s needs, less people will use Google for anything, let alone search.

    Every cloud has a silver lining.

  • http://www.socialstrategy.co.uk/ Terence Milbourn

    In order to develop a list which doesn’t simply echo the 4 points I published earlier, which are the pet peeves of the EU Commission, why not attempt to define exactly what would be a reasonable and enforceable definition of “neutral” means in terms of the results they serve?

  • http://searchengineland.com/ Danny Sullivan

    I haven’t traditionally viewed it that way because it hasn’t tended to operate like traditional search engines, pulling in listings from all over the web. For example, it’s not listing eBay products. But it certainly does operate as a product search engine for many people.

  • http://searchengineland.com/ Danny Sullivan

    Paid inclusion is a technical term for search engines that the FTC has issued disclosure guidelines for. It’s not a term that’s been commonly used for news organizations or content.

    News organization generally disclose not because of some law but because they feel a requirement to establish trust with their readers. You don’t want your readers to think some advertorial, for example, was actually part of your editorial process.

    That’s how we follow disclosure here. Sponsored stuff gets sponsored if we feel it’s not going to be immediately obvious. If a writer has something germane to disclose in terms of some type of relationship to what they’re writing on, we ask for that, as well.

    If you have some specific allegation you’re concerned about, just say it. I don’t really get what you mean when you say there’s some type of backlink program for sponsors or exhibitors.

    We have columnists and occasional guest posts here. You’ve been one of those guest authors. You and others aren’t allowed to write content here because you have some deal with us, because you’ve spoken at one of our conferences, bought some type of ad, spoken at someone else’s conferences, whatever. You’ve been allowed to write because one of our editor who oversees contributions has decided you have content of value to offer our readers.

    We expect them to be mentioning and linking to products, services and people because they think there’s a good editorial reason to be doing so. If there’s some financial connection they may have, we have guidelines already saying that should be disclosed assuming they already have some good, valid and editorial reason to be mentioning anything, positive or negative. 

    For example, when you wrote this for us:http://searchengineland.com/5-legal-tips-for-video-search-marketing-66461 

    You said:

    “And I would be amiss to not include my own legal resources with online video: ReelSEO’s Online Video and the Law column”

    You acknowledged that you had a connection with ReelSEO, but more important, there was reason to be sharing that resource in the context of that column. In addition, your bio at the bottom of the story made clear you had a connection.

    I’m not surprised the FTC has no comment yet on my letter. They only just received it. When I sent it to their Office of Public Affairs, I told them I didn’t expect they’d have any immediate comment but to let me know if they did.

    I don’t need them to take any immediate action. I do need them to review the existing guidelines they have, in order to determine if they are having compliance with those or if they think those need to be reviewed further. And I don’t expect that the only way to get those answers is if somehow news publishers suddenly rise up to do more self-responsible disclosure than they already do. I expect it to happen because it’s a very specific existing guidance issue for search engines that the FTC should be attending to.

  • http://reelseo.com/about/grant Grant Crowell

    It appears that my ability to comment directly to Danny’s response has been turned off, so I will have to do it in here instead.

    Danny, I have to disagree with your assessment that publisher sites
    like your own have no responsibility to disclose paid or other business
    relationships with outside bloggers. I base this from my interview with by
    Elizabeth Lordan of the FTC Office of Public Affairs, who stated to me
    verbatim:

    “The basic rule of thumb regarding disclosures is that if
    there is a connection between the endorser and the marketer of the product that
    would affect how people evaluate the endorsement, the connection should be
    disclosed. So the type of material or financial compensation you refer to in
    the first two scenarios should be disclosed:”

    1.   
    I1. If the blogger and the publisher (or the
    publisher’s parent company) have a business relationship that involves either
    financial compensation or other kind of material compensation

    2.   
    I2. If the blogger is hired by the parent company or
    publisher for consulting or speaking engagements.

    That would certainly apply to SEL on both accounts. There
    are several other hypothetical situations I presented to Betsy which she
    informed me would deserve scrutiny based on their individual circumstances:

    1.         
    If the blogger is giving backlinks to other
    articles on the publisher’s site

    2.         
    If the blogger is praising or otherwise
    endorsing other content, writers, or staff at either the publication or the
    parent company.

    3.         
    If the blogger is mentioning any commercial
    programs of their publisher or parent company.

    Keep in mind that the FTC doesn’t give an exemption to
    publishers who don’t actually request any of the activities from their bloggers
    (whom they have business relationships with). Just by the nature of their
    existence, the FTC says they require those business relationships to be
    disclosed along with their published content. We don’t set the standard, the
    FTC does.

    I’m glad that you pointed out that as a former blogger of
    Search Engine Land and speaker at an SMX conference, I’ve been careful to
    disclose my business relationships for any published content that features
    companies like yours. That’s why I always do it when I get a media pass to I
    have with a conference, which I did when you personally granted them to me
    before with your own events.)

    However I disagree with your assessment that publishers and
    bloggers are doing enough and that it doesn’t have the same sense of urgency as
    your issue with the search engines on paid inclusion.  Plus I think your looking at it from a
    microscope is actually hurting your ability to make a serious impression with
    the FTC. The FTC’s job is to protect consumers. You need to stop looking at the
    issue solely from the eyes of a search engine and starting looking at it from
    the eyes of a consumer.

    I agree with the statement made by Douglas Karr, a
    well-respected SEO guy and author of “Corporate Blogging for Dummies,” who
    recently made this statement on the issue:

    A consumer doesn’t care where the paid placement money
    went… to the search engine, an SEO company, a backlink service, etc.  The consumer only cares whether or not they
    are being deceived.  If any money
    exchanged hands from the company to benefit their ranking without disclosure -
    it’s deceptive. There is no exception.  I
    don’t care whether or not it’s defined in the FTC regulation… it’s still
    deception.”

    While “paid inclusion” or “paid placement” may not fit your
    definition of the regulation you’re quoting, consumers want to know what
    content has been paid for – regardless of whether it’s the advertiser paying
    for it or the publisher is paying for it. You can’t just expect them to believe
    you when you say that there’s no need for them to know because you personally
    don’t see it as an issue. They expect and deserve more transparency if you’re going
    to maintain a sustainable level of trust and authority, especially when you’re
    trying to put yourself out there as a consumer watchdog.

    Regarding the search engine paid inclusion issues, I think
    you need to mobilize your audience that feels as strongly as you do to also submit
    their complaints to the FTC, and give them the proper information to do so. (I’ve
    included that below.) Again quoting Betsy Lordan, ““The FTC generally does not
    send a response, and does not resolve individual consumer complaints. But
    these complaints can help us detect patterns of wrong-doing, and lead to
    investigations and prosecutions. The FTC enters all complaints it receives into
    Consumer Sentinel, a secure online database that is used by thousands of civil
    and criminal law enforcement authorities worldwide.”

    The proper way to submit a complaint is to follow the
    guidelines at  http://ftc.gov/opa/2009/10/endortest.shtm? (Go
    to to https://www.ftccomplaintassistant.gov/or
    call 1-877-FTC-HELP (1-877-382-4357))

    (Lastly, I think you need to read my previous response more
    carefully regarding the backlinks issue. I did not say that is something SEL or
    your parent company does with vendors who sponsor your events. I said that was
    something some of the sponsors of your events have been reported to do as a
    service for their clients. Just because your company has these vendors as
    sponsors doesn’t mean you endorse what they do, but it deserves to be brought
    up nonetheless, especially for any commercial ventures like conferences that are directly associated with a publication like yours.)

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  • http://www.socialstrategy.co.uk/ Terence Milbourn

    @Danny ~ Are you any closer to developing a list which defines exactly what would be a reasonable and enforceable definition of what “neutral” means in terms of the results search engines like Google should serve?

  • http://www.socialstrategy.co.uk/ Terence Milbourn

    Scientists Benjamin Edelman and Benjamin Lockwood of Harvard University are conducting a research of measuring the search bias of several big search engines such as Bing, Google, Ask and Yahoo. Preliminary results lead them to the conclusion that there’s a bias in Google search favouring Google’s own Internet products like Google Mail:

    “Google typically claims that its results are “algorithmically-generated”, “objective”, and “never manipulated.” Google asks the public to believe that algorithms rule, and that no bias results from its partnerships, growth aspirations, or related services. We are skeptical. For one, the economic incentives for bias are overpowering: Search engines can use biased results to expand into new sectors, to grant instant free traffic to their own new services, and to block competitors and would-be competitors. The incentive for bias is all the stronger because the lack of obvious benchmarks makes most bias would be difficult to uncover. That said, by comparing results across multiple search engine, we provide prima facie evidence of bias; especially in light of the anomalous click-through rates we describe above, we can only conclude that Google intentionally places its results first. “

    http://www.benedelman.org/searchbias/

  • http://twitter.com/dennisglavin Dennis Glavin

    Danny -

    I found the content of your letter interesting, but the existing of your letter a bit troubling. 

    Briefly, I value the reporting on Search Engine Land.  In a technology industry where news sites often are thinly disguised press releases, Search Engine Land often distinguishes itself from other technology websites and blogs.

    When a website that publishes news, takes a turn and actively attempts to directly influence policy, that online journal has stopped reporting on the news, and is in fact creating the news.

    Had you sent your letter to the FTC and made it available to other news outlets, that might have been better.  Maybe you did.  If perhaps, another member of your team had written an article about your letter, that may have been better still.

    When a reporter/editor directly gets involved in a regulatory issue and then personally writes about it, one can’t help but get squeamish about the objectivity of the website. 

    Here’s hoping Search Engine Land will continue to report the news and not create it.

    Dennis

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