After A Month, Silence From The FTC On Search Engine Disclosure

A month ago, I sent a letter to the US Federal Trade Commission asking it to review how search engines are complying with its guidelines on disclosing listings where payment is involved. The silence since then, as the saying goes, has been deafening. That’s a pity given how important that review is to the on-going antitrust investigation of Google on both sides of the Atlantic.

This week, I emailed the FTC on Monday as a follow-up, asking if after so much time, it had any response at all. I heard nothing back. Later that day, I went old school, picked up the phone and called the press office. I was told that yes, my letter had been received and that yes, I would hear back at some point.

I emailed one last time yesterday. Did the FTC have any comment at all that I could put into the “it’s been a month” story that I was writing. No response.

Google Backs Review; Others Are Mum

I’ll stay tuned. The issue isn’t going to disappear. In particular, next week I’ll be writing a follow-up article with one of two headlines:

Google Supports FTC Review Of Search Engine Disclosure Compliance; Microsoft Doesn’t

Google & Microsoft Support FTC Review Of Search Engine Disclosure Compliance

WebProNews already had the first headline last week. While I was on vacation (two full weeks off, completely unplugged, it was great, thanks!), the publication did a survey of Google, Microsoft, Expedia and Orbitz, asking who backed a review. The results? Google was in favor, Microsoft had no comment and the latter two didn’t respond at all.

Google gave me the same statement this week that it gave WebProNews:

Consumers benefit from clear labeling in search results, and we have always clearly disclosed which links are paid advertisements. That said, not all search engines clearly disclose paid results, so we would support a fresh look by the FTC at search labeling and transparency practices.

I’ll be checking directly myself with Microsoft next week, hence why you’ll see one of those two headlines I mentioned above. It’ll be a nice way to keep the issue fresh. Maybe then it’ll get a little notice from, I don’t know, any of the mainstream media?

Mainstream Media Coverage Mum

My letter was sparked by an opinion piece in the Wall Street Journal from Nextag CEO Jeffrey Katz attacking Google on transparency grounds. I dissected that piece, illustrating how when it came to transparency, Nextag was likely violating the FTC’s guidelines on paid disclosure. Then I moved on to my FTC letter, because the entire industry seems to be having issues in various degrees with the guidelines.

I’d have thought that might have been worth a story in at least one mainstream news publication, dare I hope even the Wall Street Journal, which started it all? Nope. The Wall Street Journal cannot seem to get enough about writing any story that involves Google and the FTC but this story — and it’s a legit one — got ignored.

Hey, it’s not like the New York Times bothered covering it either, that I saw. News of the letter also happened just before Apple announced the new MacBooks and iOS 6. I guess there wasn’t time to look at it, with all that madness going on.

Pity though, because when Apple announced that it would have new maps powered by Yelp, that’s one of those disclosure things that perhaps consumers should know about. Is Yelp paying for that placement? Is Apple getting paid? Should consumers know about that relationship, just like they might need to know about relationships Google has with handset makers or Microsoft has? That’s all stuff I addressed in my letter, stuff that got ignored.

Heck, I even emailed Robert Thomson, the managing editor of the Wall Street Journal offering to write an opinion piece of my own for the WSJ on the topic. No response. Kind of sad, because I genuinely enjoyed sitting with him on a panel in 2009 on newspapers and journalism.

Independent Experts Not Wanted?

That was an FTC panel, by the way, that I was asked to take part in. So I’m not exactly a crackpoint nor an entity unknown to the FTC. In fact, the entire reason the FTC has search engine guidelines in the first place was because of reporting I did last decade on possible consumer confusion when it came to search engine listings.

That leads to something else that’s been annoying me, somewhat related. I’ve had a number of calls this week from reporters trying to understand what might happen with the European Union’s antitrust review of Google. Remember in May, how the EU loudly and publicly gave Google four points it wanted responses to by July 2? Google responded, and now we wait.

One reason for the calls is because we don’t know what Google said. The EU hasn’t released the letter. It wasn’t shy about demanding it, and with all this talk about transparency being batted about, you’d think it would have immediately released the letter so we could all know what Google said. Google, which confirms to me that it did send a letter, says it’s up to the EU to release the contents.

Tap tap, so we wait. Reporters try to guess what the next step might be. I get call from them, because I’ve covered the search space for 16 years now. I’m considered somewhat of an expert.

My typical response is that both the EU and the US have problems with their cases because of a fundamental misunderstanding of how search engines work (see also Dear Congress: It’s Not OK Not To Know How Search Engines Work, Either). That’s prompted some reaction from reporters I’ve talked with that surely the regulators have been carefully researching all of this for months.

Not really. I’m not convinced of that. I know I’ve not spoken with FTC or EU investigators, and there are few, if any, who have been looking at the search engine space for as long as I have. If you were trying to understand the current landscape, trying to do it properly, I think it would be worth talking to me.

But hey, that’s me. Of course I’d think that! But the point of writing the paragraph above isn’t an attempt to be big-headed or because I somehow feel put-out. I don’t have any personal disappointment here. I have a professional disappointment with governments, because I’ve continued to learn that in these type of investigations, they seems to only talk to people that the lobbyists push toward them rather than getting out and doing independent research.

Who will the regulators hear from? Well, the EU did send Google advertisers a lengthy survey (by the way, the fact there was no fifth point in the recent EU letter about ads influencing listings means the EU failed to disclose that was an accusation if must have determined wasn’t true). But really, I suspect they hear from anyone that Microsoft-backed FairSearch pushes forward with what will inevitably be an anti-Google view. Meanwhile, Google’s busy funding experts of its own which independently discover there might be a First Amendment protection for its listings (hmm, where have I heard that before?)

Me, having watched the search engine industry grown up, I want it to be healthy to players all around: the search engines, the companies that depend on them and the consumers. Rather than the current antitrust review being driven by Google competitors, not worried about consumers but their own bottom lines — and depending on lobbyist research — I want an actual solid investigation into how the entire industry deals with search listings, to see if there are problems for consumers.

Back To Disclosure

That leads me back to my call for a review of disclosure. One solution to the EU’s points of contention might be better disclosure of self-promotional listings, as my colleague Greg Sterling covered last month (see Settlement Of Google-Europe Antitrust Claims Might Involve Labeling “Google Products” In SERP). If so, that’s really something the entire industry should do, not just Google.

More important, it’s difficult now to even know what we consider to be a search listing that’s supposedly “fair” or “neutral” or not. Nextag is one of the shopping search engines all riled up that Google supposedly favors its own shopping search engine by promoting Google Product Search in Google’s main results.

Problem solved. Google Product Search To Become Google Shopping, Use Pay-To-Play Model from us in May covers how Google is dropping those shopping results to instead show a shopping ad box, since all of its shopping search listings are to become ads. No one really questions that Google can’t run its own ads in its main results, even for itself. Antitrust case closed?

When is a search listing an ad? When does an ad need to be disclosed? These are foundational answers you need to know if you really want to conduct a review about anti-competitive actions. The FTC had compiled guidelines covering these types of things. But in the nearly 10 years since those were created, the search engines themselves seem happy to ignore or redefine those. That’s why it’s essential the FTC conduct a review. I don’t see how you do an antitrust review without the disclosure review.

I am hopeful something will come of my letter. I was encouraged to see Marvin Ammori write in GigaOm last month that a review should happen. I do have faith the FTC will eventually get back to me. Stay tuned.

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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.

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  • unprogram

    FTC doesn’t seem to care. Main stream media isn’t picking it up. Google disagreed with you on the definition of ‘paid inclusion’.

    There are two possibilities. Either nobody gets what you are saying  ( or ) you need to take another look at your position.

    I believe you need to take another look at your position. It is very simple really – you need to take a look at two factors – a) What implicit or explicit customer expectations are being violated? (not pundits expectations – but real customer expectations) b) How much competition the regulated body has in the market.

    If Google is inserting its own entries in the SERPs without proper disclosure – it is a problem.

    If Nextag operates its entire website on paid model – not a problem.

  • http://twitter.com/uwe Uwe Tippmann

    sounds like a conspiracy theory – but hey, same here in Germany – Google funded (4.5 million Euro) the first official German internet institute in Berlin – to start projects called “regulation watch” http://www.hiig.de/en/research/internet-policy-governance/regulation-watch/ – hooray :)

  • http://www.facebook.com/david.rekuc David Rekuc

    The issue isn’t that nextag is entirely paid, its that they don’t disclose it.  There’s nothing on their site that tells the consumer they’re looking at ads.  Very much a problem.

    I don’t care what your share of the market is, if you’re using deceptive techniques to list ads, you should be reviewed.

    Personally, I’m extremely happy that Danny covers this topic and I have a source of information that isn’t provided with an existing agenda.  Changing his position so that people sit up and pay attention is nothing short of foolish.

    EDIT: The fact that these agencies/companies are reluctant to reply most likely means he’s asking the right questions.

  • http://searchengineland.com/ Danny Sullivan

    Yep, it could totally be that I’m off-base and my position is wrong.

    Let’s summarize that position again.

    A US regulatory body issued guidelines to search engines about disclosure. Those guidelines are clearly not being followed by some search engines, while they are being redefined by others.
    Let me translate that into something else.

    A US regulatory body issued guidelines to food manufacturers about labeling. Those guidelines are clearly not being followed by some manufacturers, while they are being redefined by others.

    Both seem important stories to me, if a regulatory body’s guidelines are being ignored.

  • unprogram

    Lets say Nextag (or other CSEs such as PriceGrabber, BizRate etc.,) were to disclose somewhere that all their listings are paid – where do you suggest that it is done? It would be silly to mark all their content ‘sponsored’ in the way Google does – because there is no content that is not sponsored. So it makes sense they disclose it on a separate webpage or in the footer. What difference do you think such disclosure would make in the behavior of the users who are landing on these CSE pages? Zero. What loss the CSEs would incur if they disclose it somewhere on the website? Zero.

    I rest my case. It is a non-issue – that is why nobody cares.

  • http://searchengineland.com/ Danny Sullivan

    I’d suggest it be done according to what the FTC asks search engines to do. Right now, there is nothing “clear and conspicuously” disclosing that all the result are paid. That’s what the FTC wants.

    There’s nothing like that on the home page. Not on the search results page. Not on the help page. Nothing. See also:

    http://searchengineland.com/given-nextags-lack-of-transparency-its-wsj-opinion-piece-asking-for-google-transparency-isnt-wise-124045

    The case remains that there are disclosure guidelines that the FTC issued for search engines to follow — all of them, not just Google. 

    When the CEO of Nextag is comfortable slamming Google over transparency, in hopes of FTC action,  when not even following the transparency guidelines of the FTC itself, that pretty much says the industry doesn’t give a darn about those guidelines. That’s not exactly encouraging for the FTC.

  • http://pulse.yahoo.com/_J6AB7B7E2MLHHWGL4SWKY5UEFM bizhacks.com

    I would like to see the FTC and DOJ checking on how is google managing click fraud, how do they come up with “fraud click refunds”, how do they claim minimum bid price that never seems to exist, how do they been using so much personal data to profit via third parties or direct and that they announced that they will just  start charging for clicks, how do they ask merchants to accept to disclose very sensitive data about merchant sales forcing them to break their own privacy and terms of use policy, how can they decide what can be posted or not in the shopping engine ( aka google vs fire arms, which can be also just accessories or maintenance items, vs. medicines which are not really medicines ) how can they decide what people can see, read or learn? how come they don’t allow people to see who clicks or how often a “given alias” clicks so  that sellers can block that alias, how come google suggests the sharing of personal data with so many services, how come google buys so many companies just for the patents to then kill them and secure their leadership ( known as monopoly in my town ) how come google is allowed to place ppc links in the very top of mobile displays which very likely can be clicked by accident? how can google decide in a trusted store program based on service of course, when they have the very worst service in the world? how can someone play judge and be the crook? That is just a bit of what the FTC and DOJ can be looking at.

  • Lloyd Duhaime

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