Issue: FTC Guidelines
Affect IYP, Search Space
News: The Federal
Trade Commission (FTC) recently responded to a deceptive advertising complaint,
filed July 16, 2001, by the watchdog group Commercial Alert. The group
requested an investigation of various search engines' paid placement/paid
inclusion programs as a possible violation of the Federal Trade Commission
Act. Companies named in the complaint were AltaVista, AOL, Direct Hit,
iWon, LookSmart, Microsoft and Terra Lycos.
The FTC Act (15 U.S.C.
§ 45(a)(1)) "prohibits unfair or deceptive acts or practices in or affecting
commerce." Commercial Alert claimed that search engines may have violated
the act by leading consumers to believe that all search results were ranked
by relevance and not informing them that some search results could be
The FTC decided to
take no formal action at this time. However, the commission has established
definitions of paid placement and paid inclusion and recommended that
all search engines follow these guidelines to differentiate between paid
and non-paid content.