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SEMPO Appeals to FTC for Updated Search Engine Disclosure Guidelines

  |  October 18, 2012   |  Comments

SEMPO has written the U.S. Federal Trade Commission in support of a review and revision of their 2002 guidelines for search engine disclosure of paid advertisements in search results.

sempo-logoSearch marketing industry association SEMPO has appealed to the FTC for a review and revision of the 2002 guidelines for search engine disclosure of paid advertisements in search results.

In addition, SEMPO has offered “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,” should the agency choose to accept.

SEMPO has reached out to the FTC before, most recently in November last year when they protested “heavy-handed” regulation of Internet content publishing. Their current letter to FTC Chair Jon Leibowitz reiterates their position from last November: “Search is not a government-run utility, established by law and thus subject to bureaucratic oversight. It is a service provided to consumers and businesses by companies, which have set up their operations using their own principles, proprietary technologies and algorithms.“

The FTC has not officially announced a review of the guidelines for search engine disclosure of paid advertisements in search results. SEMPO’s letter states they understand “the FTC's Consumer Protection Bureau is now looking closely at the issue.”

Search Engine Guideline Compliance

Here is the SEMPO letter to the FTC in full:

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 [redacted], to discuss further how we might help.

Very truly yours,

Mike Grehan, President

Chris Boggs, Chairman

Rob Garner, Vice President

Mike Corak, Treasurer

cc:

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

Antitrust Case Against Google Seems Inevitable

SEMPO’s letter comes on the heels of other FTC vs Google news. The FTC is preparing a formal antitrust case against Google, which could come as early as late November. Citing “three people familiar with the matter,” Reuters reported Saturday that four of the five FTC commissioners are convinced Google “illegally used its dominance of the search market to hurt its rivals.”

Additional reports, like this one from the New York Times, say the central issue in the case is “whether Google manipulates search results to favor its own products, and makes it harder for competitors and their products to appear prominently on a results page.” A 100-page draft memo recommending the case move forward is said to be circulating among the five commissioners. In order for the case to proceed, three of the five commissioners would have to vote in favor of the action.

This article was originally published on Search Engine Watch.

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