Search engines accused of deception
Associated Press
SAN FRANCISCO — Attacking an increasingly popular Internet business practice, a consumer watchdog group yesterday filed a complaint with the Federal Trade Commission asserting that many online search engines are concealing the impact that special fees have on search results by Internet users.
Commercial Alert, a three-year-old group founded by consumer activist Ralph Nader, asked the FTC to investigate whether eight of the Web's largest search engines are violating federal laws against deceptive advertising.
The group said the search engines are abandoning objective formulas to determine the order of their listed results, and are selling the top spots to the highest bidders without making adequate disclosures to Web surfers.
The complaint touches a hot-button issue affecting tens of millions of people who submit search queries each day. With more than 2 billion pages and more than 14 billion hyperlinks on the Web, search requests rank as the second most popular online activity after e-mail.
Over the past year, search engines, in hopes of boosting revenue, have been accepting payments from businesses interested in receiving a higher ranking in certain categories or ensuring that their sites are reviewed more frequently. They typically use two plans: pay-for placement, which bases a search engine's rankings on the amount of money paid by a business; and pay-for-inclusion, in which a fee is accepted from a business that wants a search engine's automated "crawlers" to review sites more frequently.
The complaint marks the first time federal regulators have been asked to look into the practices, said Danny Sullivan, an analyst for Searchenginewatch.com.
"It's becoming so widespread that it was probably only a matter of time before something like this happened," Sullivan said.
Commercial Alert alleges that the search engines' paid listings are equivalent to television informercials masquerading as independent programming. In the past, the FTC has cracked down on informercials that weren't adequately labeled as advertising.
The search engines named in the complaint are: MSN, Netscape, Time Warner Inc., Directhit, HotBot and Lycos (both owned by the same company), Altavista, LookSmart and iWon.
Portland, Ore.-based Commercial Alert could have named even more search engines in its complaint, but focused on the biggest sites that are auctioning off spots in their results, said Gary Ruskin, the group's executive director.
"Search engines have become central in the quest for learning and knowledge in our society," Ruskin said. "The ability to skew the results in favor of hucksters without telling consumers is a serious problem."
By late yesterday afternoon, three of the search engines had responded to inquiries about the complaint. Two, LookSmart and AltaVista, denied the charges. Microsoft spokesman Matt Pilla said MSN is delivering "compelling search results that people want." The FTC had no comment about the complaint.
Commercial Alert said the search engines are breaking the law by not making it clear that their results "are paid ads in disguise."
The managers of the search engines contend that results swayed by fees are clearly labeled. The search engines typically show the fee-paying sites under headings such as "Featured" or "Partner" sites. The results retrieved using objective formulas generally are listed under a separate heading.
"Based on the feedback we have received, our users are very clear about the distinctions. We feel very good about our service," said Kristi Kaspar, spokeswoman for AltaVista, which launched its pay-for-placement service earlier this year.
• On the Web:
- www.commercialalert.org
- www.msn.com
- www.netscape.com
- www.iwon.com
- www.altavista.com
- www.directhit.com
- www.lycos.com
- www.hotbot.com
