On Google Earnings Call, Google Ignores FTC Definition Of “Paid Inclusion”

On its earnings call today, an analyst asked Google about the new paid inclusion model for Google Shopping. The analyst got corrected. Google doesn’t call what it’s doing paid inclusion, he was told. That’s because Google is comfortable continuing to ignore the US Federal Trade Commission’s definition of what “paid inclusion” is. It’s yet another example that the search engine industry doesn’t really care about the FTC’s search engine guidelines.

Definitions? We Don’t Need No Stinkin’ FTC Definitions

I’ll update this story with the extended quote after the earnings transcript goes live later. But when asked about “paid inclusion,” Google senior vice president Susan Wojcicki said:

We actually don’t refer to this as paid inclusion … [paid inclusion means] putting paid things into the search results in a non-marked way.

That’s not what paid inclusion means. It wasn’t what paid inclusion meant when Google first fought against it years ago, when it was a common practice in the industry. It’s not the definition that the industry itself used, nor that the FTC used, when it drafted its disclosure guidelines about paid inclusion.

Paid Inclusion Doesn’t Mean Failure To Disclose

My previous post, Once Deemed Evil, Google Now Embraces “Paid Inclusion”, explains in depth what paid inclusion was, Google’s opposition to it and the FTC’s still current definition. Let’s look at that again:

Paid inclusion can take many forms. Examples of paid inclusion include programs where the only sites listed are those that have paid; where paid sites are intermingled among non-paid sites; and where companies pay to have their Web sites or URLs reviewed more quickly, or for more frequent spidering of their Web sites or URLs, or for the review or inclusion of deeper levels of their Web sites, than is the case with non-paid sites.

Paid inclusion listings are subject to disclosure guidelines but they are not defined by a lack of disclosure. Paid inclusion is defined as payment for inclusion in search listings. Period.

Google Is Doing Paid Inclusion….

That is exactly what Google has been doing with some search properties over the past year, charging to be listed within them outside the usual ad areas. That’s precisely what it is doing with Google Shopping, using a paid inclusion model.

So why doesn’t Google just use that term? Why is Google unilaterally trying to redefine a term that was long used in the industry and core to disclosure guidelines created by a US government agency?

And Is Embarrassed About It (So Change The Meaning!)

That’s easy. It’s embarrassing. As I said, Google used to be fiercely opposed to paid inclusion, to the point of even putting it under the “evil” heading of things it would never do. It touted in 2004 that by NOT having paid inclusion, its shopping search was better:

Because we do not charge merchants for inclusion in Froogle [what’s now Google Product Search and soon to be called Google Shopping], our users can browse product categories or conduct product searches with confidence that the results we provide are relevant and unbiased.

But in 2012, we’re now told by Google — repeatedly — that having a commercial model will produce better shopping results. What was evil overnight becomes good, as well as a nice new revenue source for Google.

Is Anyone Home At The FTC?

Google feels comfortable ignoring the FTC’s definition of paid inclusion, if it’s embarrassing to the company. Nextag feels comfortable not only ignoring the required disclosure of paid inclusion (which at least Google does) but also attacking Google on consumer transparency grounds.

These twin events in recent weeks are why I wrote to the FTC asking if it even considered its guidelines to be relevant, as well as if it felt the industry was living up to them.

Last week, I wrote how after a month, the FTC had given no response. Meanwhile, the search engine industry seems happy to continue ignoring the FTC’s definitions and guidelines. That’s not a situation you’d think a regulatory body would like to have continue.

More background on these issues is below:

• Once Deemed Evil, Google Now Embraces “Paid Inclusion”
• Google Product Search To Become Google Shopping, Use Pay-To-Play Model
• Given Nextag’s Lack Of Transparency, Its WSJ Opinion Piece Asking For Google Transparency Isn’t Wise
• A Letter To The FTC Regarding Search Engine Disclosure Compliance
• After A Month, Silence From The FTC On Search Engine Disclosure