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Google, Yahoo warned over ad labelling

The Federal Trade Commission (FTC) has written to US-based search engines warning them to “clearly and prominently” distinguish advertising from “natural” search results.

business Updated: Jun 27, 2013 22:46 IST

The Federal Trade Commission (FTC) has written to US-based search engines warning them to “clearly and prominently” distinguish advertising from “natural” search results, saying that over the past decade it has seen companies beginning to mix the two.

The letter has been sent to the three largest US search engines - Google, Yahoo and Microsoft’s Bing – among others for shopping, travel, and local business which display adverts to users.

The FTC, set up to protect US consumers’ interests, does not name any search engine company in particular as having breached its rules.

But it warns the companies that “consumers ordinarily expect that natural search results are included and ranked based on relevance to a search query, not based on payment from a third party. Including or ranking a search result in whole or in part based on payment is a form of advertising.”

It says in the past year, the tendency for search engines to put adverts immediately above “natural” results — as Google and others do — has led more than half of users not to recognise them as adverts.

In a survey, nearly half of searchers said the background shading for adverts was white - exactly the opposite of the correct answer, where paid ads above “natural” results are distinguished on almost all search engines by having a non-white background shading. Paid adverts on the right of natural search results have a white background on Google, Bing and Yahoo.

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