Company X, formerly Twitter, was discovered running uncategorized ads on its platform in September. Now, this issue, which has been ongoing, has been brought to the attention of the Federal Trade Commission. An independent, non-profit organization Check my ads It has filed a formal complaint with the US Federal Trade Commission urging an investigation into X’s advertising practices, including failure to disclose which posts are ads, broken links explaining why ads are targeted, and more.
The complaint cites X’s lack of advertising disclosure, saying it misleads consumers that the content and information they consume on the platform is not paid for.
“This misrepresentation deceives users into trusting the content as organic, and increases the chance of fraud,” the complaint states. “Furthermore, by failing to adequately disclose advertising, X Corp. is providing misleading information
Methods used to target users or facilitate third-party advertising targeting.
He also notes that X’s promotional materials to advertisers indicate that ads are distinguished from unpaid organic content with a “promoted” label, but no such label appears to consumers. As Mashable previously reported, X It seems to switch between The “Promoted” and “Advertising” label format has been in use for some time. Most ads on X are now simply labeled “Ad” but some appear in users’ feeds without any ad label attached at all.
TechCrunch ran into this issue ourselves in September. In testing, we came across a good range of unnamed ads from accounts we didn’t follow. The only indication that it was an ad was by clicking on the three dot menu at the top right of the post. When a post is an ad, you’ll see menu options like “Why this ad?” And others. Check My Ads says it’s found that explainer links for ad targeting don’t even work in some cases.
At the time, it was unclear whether the issue was a bug or a deliberate attempt to trick X users into thinking the ads were organic content.
Since the original reports appeared, Check My Ads says it has received “hundreds” of examples from X users who encountered issues with unnamed ads.
“It seems to be a really widespread problem,” said Sarah Kay Wiley, director of policy and partnerships at Check My Ads. We had people give examples every day of things they were seeing,” she noted. “It impacts both mobile, as well as web, and then also the For You timeline and the Following timeline.”
The latter is especially egregious because the following timeline is only intended to include posts from people and accounts you’ve specifically chosen to follow. Wiley said the appearance of unclassified ads in this timeline is particularly deceptive and a “huge problem.”
The organization notes that it was still receiving reports about the issue last week, indicating that X has not yet addressed the issue, despite media reports on the topic from TechCrunch, Mashableand others. Mashable has also been tagged That X had implemented a new ad format that could not be blocked or reported, as well as failing to disclose that some posts were ads.
Other nonprofit consumer watchdogs have also been aware of the problem with X’s ads. The Center for Digital Democracy told TechCrunch that it believes the FTC should investigate X’s use of hidden advertising and impose fines and penalties. (The organization says it is not working on filing a similar complaint with the FTC at this time.)
Check My Ads’ complaint alleges that X violates Section 5 of the Federal Trade Commission Act. This section gives the FTC broad authority to regulate unfair and deceptive trade practices. As a result, it can issue injunctions or fines to punish companies for bad behavior, which is what the nonprofit would like to see happen.
The complaint also states that X may infringe existing Order set for 2022 with the Federal Trade Commission (FTC), Prohibit misrepresentation of its advertising practices. X paid a $150 million fine as part of its settlement with regulators related to an issue dating back to May 2013 and continuing through September 2019 that saw To target these users with ads.
“Company “We make the argument in the complaint that this is a violation not only of Section 5 of the FTC Act, but also of the prior consent decree.”
It’s not clear how much today Musk confirmed publicly In September 2023, X’s US ad revenue fell by 60%. The company is now worth $19 billion as of October 2023, a 56% decline in value over the past 12 months, Fortune magazine reported, citing internal documents.
Although Check My Ads tends to focus on ads that run on the open web, the problem of deceptive ads came to the organization’s attention due to X’s announcement that it would begin sharing ad revenue with content creators. Those payments totaled about $20 million, X CEO Linda Yaccarino said. But if the ads are unclassified, it’s not clear that creators are getting the right portion of them.
Although Check My Ads typically contacts companies when it finds issues like this, the ongoing nature of the issue (and the lack of a point of contact after Twitter gutted 80% of its workforce, including compliance and engineering), has led the organization to believe this It could be more than just a glitch. This prompted the organization to file the complaint directly with the FTC without going to X first.
“We hope they take this seriously, especially considering Twitter will allow political ads to run on the platform again before 2024.” [elections]“Wiley said.
She added that it could be months before an investigation begins, if the FTC chooses to take action.
X did not return requests for comment.
The full FTC complaint is below.
Check out my advertising complaint filed with the FTC investigating X’s advertising practices by TechCrunch On Scribd