US regulator tells search engines to mark ads more clearly

The  US trade regulator has warned internet search giant Google Inc and its rivals like Microsoft Corp, Yahoo Inc, and other web-search engine providers to identify more clearly paid ads in their search results, particularly as new technology such as mobile and voice-based online services becomes more common.

The US Federal Trade Commission said on Tuesday it had sent letters to 24 internet search companies, updating its guidance on advertising practices.

The FTC's update to its 2002 guidance on search advertising practices comes as consumers are increasingly accessing the internet on small-screened smartphones and using specialised apps and social media services to find information online.

Mary K Engle, the agency's associate director of advertising practices, said in the letter that ''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 letter which was made public by the consumer protection department of the FTC agency on Tuesday contains new guidance on how the search engines could use ''visual cues, labels, or other techniques to effectively distinguish advertisements'' so that consumers aren't misled.

If search engines don't follow such rules, the agency could open a probe into whether they are being ''deceptive'' to consumers under Section 5 of its enforcement authority, which could lead to fines. The FTC has the power to impose such fines.

The agency said background shading for search ads that appear alongside natural search results was not always sufficiently visible, particularly on mobile devices.

Text labels intended to flag search ads were not always easy to spot, as some search engines have reduced the font size of the text or placed a single label at the corner of a group of ads.

In the case of voice-based search for instance, the agency said that a search engine should make an "audio disclosure that is of an adequate volume and cadence for ordinary listeners to hear and comprehend it".

The letters, which were also sent to several popular "vertical" search engines that specialise in online shopping, travel and local business, did not specifically accuse any search engines of wrongdoing.

Google said in a statement that clear labelling and disclosure of paid search were important and "we've always strived to do that as our products have evolved".

Yahoo, which had 6.6 per cent share of the US online search ad market in 2012, said it was reviewing the letter and stressed its commitment to a transparent search experience.

The FTC guidance update says the agency recognises that search is ''evolving'' and can now be found in ''social media'' and ''voice assistants on mobile devices''.

Social network site Facebook Inc and microblogging service Twitter Inc have search features, as do voice-based services offered by Google and Apple Inc.

When a ''voice interface is used to deliver search results, a search engine should make an audio disclosure'' if a result is based on payments by a third party, the FTC said in the letter.

Both Microsoft and Apple, which introduced the Siri voice assistant in 2011, have so far declined to comment.