In letters to Google, Yahoo, AOL, Microsoft's Bing, and several other search engines, the FTC updated its guidance from 2002 about the need to distinguish between advertisements and search results. Since that original letter in 2002, the FTC has seen a decline in compliance with its guidelines.
"The letters note that in recent years, paid search results have become less distinguishable as advertising, and the FTC is urging the search industry to make sure the distinction is clear," the group said.
To avoid that, search engines should use visual cues, labels, or other techniques to make it clear what items are ads, no matter if the results are shown on the normal Web, social media, mobile apps, voice assistants on mobile devices, or specialized search results.
"Although the ways in which search engines retrieve and present results, and the devices on which consumers view these results, are constantly evolving, the principles underlying the 2002 Search Engine letter remain the same: 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," the FTC said in a sample letter to the search companies. "Including or ranking a search result in whole or in part based on payment is a form of advertising."
A Google spokesperson said that "clear labeling and disclosure of paid results is important, and we've always strived to do that as our products have evolved."
A Microsoft spokesperson said it was "an important issue to the industry and we take our role in it as a search leader very seriously. We look forward to analyzing the FTC guidance and working to ensure consumers can continue to trust Bing for their search needs."
We've contacted Yahoo and will update the report when we have more information.
Paid placement allows an advertiser to pay for higher ranking or prominence on a results page, relative to a keyword search. But the practice drew the FTC's interest in 2001 after a complaint that search engines routinely misled consumers by promoting paid links as "recommended" or "featured" sites. After a nearly year-long investigation into the issue, the FTC sent letters to search engine companies in 2002 outlining the need for clear disclosure of paid listings on their sites.
Late last year, a search marketing industry group, the Search Engine Marketing Professional Organization, disclosed that the FTC was "strongly considering" a review of whether Web search engines were complying with the 2002 guidelines for paid listings. In suggesting a revision of guidelines, SEMPO pointed out that the search industry has changed dramatically in the decade since the current guidelines were created.
Here's a sample letter the FTC sent to search providers:
Updated at 7:20 p.m. PT With Microsoft statement.