SEMPO: FTC Is “Strongly Considering” Review Of How Search Engines Disclose Paid Listings

According to SEMPO, a search marketing industry association, the US Federal Trade Commission is “strongly considering” a review of how well — or poorly — search engines are compliance with its 2002 guidelines on disclosing paid listings to consumers.

The news comes in a letter that SEMPO — the Search Engine Marketing Professional Organization — sent to the FTC today offering its assistance in drafting new guidelines or examining the current state. From the opening of the letter:

We understand that the FTC’s Consumer Protection Bureau is now looking closely at the issue of search labeling transparency and is strongly considering a formal review of compliance with the 2002 guidelines for search engine disclosure concerning paid advertisement appearances in search results, as well as a possible revision of the guidelines.

The letter doesn’t offer any source for the news that the FTC is considering such a review. When I asked where the information about this was coming from, I was told by SEMPO community administrator Clare Madden that it came out of a SEMPO board meeting, though which board member shared the news wasn’t said. Her statement:

We learned through our board meeting. Not sure where our board members first learned about it, but we thought it was important to weigh in on.

FTC: No Comment; Second Source: It’s Likely

The FTC tells me it received the SEMPO letter but had no further comment. “We haven’t announced any plans for a formal review,” said FTC spokesperson Elizabeth Lordan.

Still, it seems that a review is likely to happen. A second source, someone I know who is knowledgeable about the space and Washington DC maneuverings, tells me the same as SEMPO, that the FTC’s Consumer Protection Bureau is indeed looking at doing a review of the FTC’s guidelines.

My Call For An FTC Review

If the review is happening, it was probably prompted by my letter to the FTC earlier this year. In June, I called upon the agency to conduct a compliance review to see if its guidelines about paid listing disclosure were actually being met, since as best I could tell, several search engines seemed to have forgotten them or were happy to ignore them.

After about two months, the FTC finally responded to say it had received my letter but had no further comment about it.

The Full SEMPO Letter

Below, the SEMPO letter in full (it’s not posted on the SEMPO site, so I’m reprinting it here):

October 15, 2012

Jon Leibowitz, Chairman, Federal Trade Commission 600 Pennsylvania Avenue, NW Washington, DC 20580

Dear Chairman Leibowitz:

We understand that the FTC’s Consumer Protection Bureau is now looking closely at the issue of  search labeling transparency and is strongly considering a formal review of compliance with the 2002 guidelines for search engine disclosure concerning paid advertisement appearances in search results, as well as a possible revision of the guidelines. SEMPO believes that this review and revision would be positive steps to take, and not merely in light of recent media coverage of this subject.

Should the FTC undertake such a review, in addition to signifying the understanding that recent extreme antitrust claims against Google search practices lack merit, it would also be taken to mean that the FTC perceives the benefits of taking a broader, industry-wide approach to search labeling and transparency – a positive position.

As we have publicly stated previously, the search function is not a government-run utility, established by law and thus subject to bureaucratic oversight, but a service provided to consumers and businesses by private companies, which have set up their operations using their own principles, proprietary technologies and algorithms. We feel strongly, for a host of reasons, that regulating individual companies’ search algorithms is undesirable.

Nonetheless, we believe that a level playing field should be ensured for search as a whole – both for the protection of consumers and in furtherance of fair competition within the search industry. Consumers and search engines are both better off when consumers have full transparency about why they are seeing which results on search websites. If the present FTC guidelines on paid placements are being widely flouted, or if certain industry segments – such as vertical search sites – harbor particular practices that mislead consumers, result in fraud, or offer unfair competitive advantage to their commercial customers, the public and the business community deserve to know. And they also deserve to have steps taken to protect them in future.

The 2002 search engine disclosure guidelines were helpful, but the world has changed since then. Updated guidelines would eliminate the need for more prescriptive regulation of search website results, which we believe could be harmful. The fact that not all sites, particularly vertical/specialized search sites, follow current guidelines indicates that it’s time for a fresh look at the guidelines, perhaps starting with a workshop or industry-wide conversation about the issues.

Here is where we believe we can offer assistance. SEMPO stands in a unique position. Our membership includes the leaders and experts in the Search Engine/Search Marketing industry, with all the knowledge that they possess, yet as a non-profit association we function collectively as an unbiased third party, working from the principles of fairness and equity. Our leadership team and membership community are already assisting the U.S. government: for example, we are currently working with the Department of Labor on the classification of job roles. We also compiled and submitted thoughtful and informative communications to the Senate and the House of Representatives concerning the proposed SOPA/PIPA legislation, and we mobilized others to do the same.

Therefore, we respectfully suggest that we could provide valuable insight and background to the Consumer Protection Bureau, both on the topic of a search engine guideline compliance review, and in presenting considerations for the transparency policy development process that might result after such a review.

SEMPO would be eager to contribute to any conversations or workshops on these topics. If tapping our expertise would be useful to you, please contact Chris Boggs [email and phone omitted] to discuss further how we might help.


Mike Grehan, President / Chris Boggs, Chairman / Rob Garner, Vice President / Mike Corak, Treasurer

David Vladeck, Director, Bureau of Consumer Protection
Laura Sullivan, Advertising Practices
Deborah Matties, Attorney Advisor to Chairman Jon Leibowitz
Chris Renner, Attorney Advisor to Chairman Jon Leibowitz
Chuck Harwood, Deputy Director, Bureau of Consumer Protection

As the letter notes, SEMPO has worked with the US Labor Department to classify search marketing job titles and last year, SEMPO sent the FTC a letter asking it either to not regulate or keep regulation of search engines to a minimum, prompted by the on-going Google anti-trust review.

Stay tuned, because it seems likely that the FTC will take some type of action. If you’re trying to understand more about the FTC’s disclosure guidelines, I highly recommend reading my past articles below:


Related Topics: Channel: Consumer | Features: Analysis | Legal: Regulation | Top News


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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  • Alan

    Wow Sempo offering its assistance??? That is like the fox saying it will help look after the chickens!

  • Chris Boggs

    Alan, could you please provide your reasoning behind this statement? I would like to know why you would think that. We are made up of all types of people involved with search and social marketing. However, perhaps you could share your thoughts at our FB page or somewhere else and we can focus this discussion around the letter and its contents?

  • Chris Boggs

    Danny thanks for covering this. I honestly hadn’t thought about your letter prompting the FTC – but this is certainly a possibility. Thanks for digging and finding more from other sources, as usual!

  • Alan

    I thought my comment was pretty obvious. Sempo is just a front/lobby group for the search engines! and in particular Google. I particularly remember reading this a while ago and the first thought that hit me “was not” wow these guys are independent and unbiased.

    So Chris, you are saying that you are unbiased organization of concerned individuals?

  • Chris Boggs

    We are made up of many people who make a living off search engines, at least partially. Our member list includes both small businesses and consultants and large agencies. We wrote the “hands off” letter to the FTC in direct accordance with what a number of our organization’s members were saying.

    I have been on the Board for 6 years, and have been Secretary, President, and now Chairman. I have done this as a volunteer, and the agencies I have worked for have supported me in this activity. I can tell you that although not every member of our organization has “noble” intentions to help grow our industry and it’s reputation among marketers, many do. To call us a “front for search engines” could even be construed by some as an insult. I do understand why some may think that, but everyone has their detractors. If you look back at the past leadership of SEMPO you will find many respected industry leaders who continue to promote and help grow our industry, both in the eyes of the search engines and the rest of the world.

    I urge you to consider joining as an individual member, and then being active and helping future perceptions of SEMPO to be better.

  • Miami SEM

    SEMPO is sponsored by Google as shown on their website and certified by this “Should the FTC undertake such a review, in addition to signifying the
    understanding that recent extreme antitrust claims against Google search
    practices lack merit”. They are doing Google’s bidding, not ours (avg webmasters)

    Now both SEMPO and Danny Sullivan wrote more or less the same letter to FTC. Hmmmmm….

  • Danny Sullivan

    Miami, just a note — if you want to continue to comment here, you need to do so from a profile that isn’t an anonymous Twitter account per our comments policy.

    Secondly, I think you should actually read my letter. It in particular calls for the FTC to review its guidelines in part because of Google’s unilateral decision to reinterpret what the definition of “paid inclusion” is. Suffice to say, that’s not at all “doing Google’s bidding.”

  • Alan

    Chris it really depends on what you call a respected industry leader. This industry is in a huge amount of flux now and quite frankly we are looking for leaders who will take the fight to the search engines.. actually lets not beat about the bush here.. we want leaders who will take the fight to Google not to the FTC.

    So Chris you might consider yourself a “leader” but many if not most SEO’s would probably consider you the enemy. More and more SEO’s are in a fight with Google not in a “close working relationship” as you and “the Team” at Sempo appear to be!

    I and a few others here and at other blogs and forums have been laboring this point. Google has brought this fight on. Google in its headlong rush to drive Adwords revenue at the expense of everything else is losing friends. Of course why would they care? No money in caring! If the FTC take down Google a few notches and level the playing field a little then that is good for us!

    So will I join your FB group? no way! besides the fact that it seems to be just another standard SEO page selling the usual round of seminars to unwary webmasters. There is no real discussion there!

  • Alan

    Danny the problem I have with your letter is that it appears to be motivated by what you perceived as injustice towards Google. Nextag CEO has a go at Google and next thing you know you fire off a letter to the FTC. Yes what he said was a double standard but the Gorilla in the room is Google. How about we fix Google first and worry about the small fry later?

  • Danny Sullivan

    it’s motivated over the fact that the search engines don’t appear to care about the rules that the FTC created in 2002 to protect consumers. Those rules should be enforced, regardless of a search engine’s size, or we shouldn’t have them.

    If Nextag is big enough to get featured in the Wall Street Journal attacking Google over a lack of supposed consumer transparency — while itself not following the FTC’s rules over transparency — that’s a big issue regardless of marketshare.

    But it’s also not true that the Nextag letter in the WSJ was the motivation of my letter. The motivation was exactly what I said:

    “While I’ve never forgotten those guidelines, it appears that the search engines that I cover have.”

    This has built up over time. For instance, I wrote about Google and paid inclusion issues in 2009 and 2010:

    I wrote about NexTag and paid inclusion issues last year:

    Thing accelerated for me this year, in terms of wondering whether the FTC even cared about its past guidelines,when Google firmly jumped into paid inclusion.

    I wrote about Google and issues with how it dealt with paid inclusion guidelines on May 30, in detail (two weeks before my FTC letter; two weeks before NexTag had its WSJ opinion peice).

    There’s a link to that in the letter, but I’ll give it to you again:

    Be sure to read the end, where I point out how Google sought to redefine what it considered paid inclusion to be, a definition that doesn’t match what the FTC had.

    The next day, I revisited this again when Google Shopping went to a paid inclusion model:

    The idea that the world’s largest search engine just wanted to redefined paid inclusion to be whatever it wanted to be, regardless of what the FTC had defined it as, was worrisome. After all, if you just get to redefine some regulatory bodies definitions, you can redefine yourself out of being applicable to that body’s regulations.

    To have NexTag do its WSJ letter was simply the tipping point, not the primary reason. And no, I don’t want a solution to “fix Google,” because it’s not a “Google problem.” It’s a search engine problem.

    These rules when they were drafted were said to be applicable to search engine of all sizes, because all types of consumers use them, and the FTC felt those consumers needed protection. There’s a strong argument that consumers may need these protection even more on smaller search engines that are out of the public eye.

  • Chris Boggs

    it saddens me that the voice of just a few detractors is so magnified on platforms such as these. this is like honey to a fly, a post like this, and I am helpless but to accept the hate-motivated thumbs downs being generated by only a small segment of our industry.

    I have already made my points.

  • keaner

    If the voice of “a few detractors” is “so magnified” perhaps there are many others who feel that way. If there weren’t, the “magnification” by those few would not matter…at all. To be honest it reminds me of “Fairsearch”.

    Thanks for responding here though Chris :)

  • Kevin Gerding

    I personally do not consider SEMPO a “front” for Google, but they are a noteworthy “sponsor” for sure. As far as I know, Google is throwing its large lobbying wallet behind The Internet Association. Their site is and offers vague details of what they are lobbying for. One thing is certain, they certainly are not lobbying for the little guys.

  • Pat Grady

    Danny, ask that you also peer under the lack of transparency regarding CSEs in regards to paid search domain name and trademark poaching. If this is greek to you, feel free to contact me offline, I’ll put you on the trail.

  • Alan

    And you made it badly.. typical of a front man!

  • Alan

    Exactly keaner SEMPO is just google’s version of fairsearch. Neither organization is even good at hiding just how much they are controlled by their overlords. People like Chris Boggs aren’t even aware enough of what is happening out there to realize that to be effective they should be distancing themselves from Google. Luckily FTC will see his letter for what it is.. A thinly veiled attempt by Google to control the investigation.

  • Chris Boggs

    Alan I am not sure who you are but you are starting to get personal. My reputation and my network speaks for itself. I can assure you I am keenly aware of what is going on in SEO, on both strong brand fronts and for other types of sites that have been hit recently. Please don’t stoop to personal insults. As you can see I haven’t even voted down a single one of your comments. let alone attack you.

  • Alan

    Awesome! thanks for not voting me down! You really took a load off my mind. As for your comments I doubt my vote up or down would make much difference.

  • Terry Van Horne

    I think the detractors of SEMPO would be hard pressed to find one page on SEMPO that is pro any Search Engine. Google is a sponsor… sure… how can SEMPO sending the FTC a letter asking them to look into the way Search Engines are slipping paid search into the organic search be seen as anything but bad for Google. How does that help Google?
    The wannabe SEO trolls out there whining cuz they can’t fix their broken sites …sites **they broke** with amateur tricks that were dependent on Google always counting any link is just getting old. So they did no future proofing and now are screwed and pointing fingers at everyone else…I suggest looking in the mirror for the answer…it’ll be staring back at you.
    This whining is making the industry look like a bunch of bumbling fools. That a recent Poll indicated 45% tried to recover from panda and couldn’t and worse don’t believe recovery is possible is a clear indication that these whiners should just find a job they are capable of doing because by no means is Panda tough to recover from if ya are a real SEO who understands how things work beyond just getting links.

  • Chris Boggs

    thank you Terry. In terms of bumbling fools, I think fortunately many marketers can see through the whining and find help from those with true experience coming back from hard times. “Don’t hate the player/playing field, hate the game” is certainly an applicable saying. Hey we should chat again soon! We still need to work on that “United Nations” so that we can be more aligned across industry groups.

  • MonopolizedSearch

    I don’t understand how sempo can offer assistance to the FTC with one hand and accept Google as a sponsor with the other. If I were on the sempo board, I would strongly consider how this conflict of interest devalues their entire organization.


    For sure they need to provide merchants and publishers with data of who clicks, if not the whole ip, at least the first 4 or 5 digits, click fraud is huge

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