Veteran search industry journalist Danny Sullivan has written a letter to the Federal Trade Commission, calling on the organization to look into the disclosure of paid listings in Google, Yahoo, Bing, Ask, Nextag, Twenga, and TripAdvisor.
Sullivan intros the letter, making the case for why he is worth listening to. This is essentially because he has been covering the industry since 1996, he knows the history, covered the FTC's guidelines in this area when they were created in 2002, and was cited in a Commercial Alert complaint filed in 2001, which he credits with triggering the FTC to conduct its review in the first place.
The main points Sullivan makes about Google have to do with what we've seen with the company's recent announcement of Google Shopping and other product-related results. Google is placing sponsored results, marked as such in Google search results. They're clearly marked, but as Sullivan points out, such results on Google's vertical search engines, where the results are drawn from, are not so clearly marked. For example, if you were using Google's Hotel Finder, you wouldn't necessarily know when a result was paid for.
Sullivan also suggests that there is an issue when device manufacturers who have accepted money from Google to select the search engine as its default, should disclose as much to consumers.
You would think that this stuff would be great fire power for Google's competitors trying to establish Google as a monopoly, but that isn't the point of Sullivan's letter, and he has no qualms about pointing out that many of Google's competitors engage in similar practices, including Google's main competitor (Microsoft/Bing), Nextag (whose CEO wrote a scathing article about Google's business practices in the Wall Street Journal last week and possibly TripAdvisor (who, like Microsoft, is part of the FairSearch Coalition, frequently trying to cast Google as the competition destroying beast).
"Paid inclusion is not disclosed inline with the main search results at times. For example, a search for 'dvd players' brings up a shopping box with nothing explaining that some vendors may appear because they’ve paid for inclusion," Sullivan writes of Bing. "Using the Bing Shopping site directly, the results also lack any disclosure."
Like Google, he also mentions that Bing has deals with with manufacturers, broadband and wireless providers, who "might fail to disclose why Bing was made a choice or that they receive money because of this."
His case for TripAdvisor isn't quite as strong. Sullivan writes: ”'Sponsored links' seems to be the label used for some paid placement ads, and these are kept distinct from editorial content. However, TripAdvisor has a variety of ad units that might not make clear that these are ads, such as 'Special Offers' that are only special to the degree that someone can pay to 'appear at the top of your area’s list of accommodations, regardless of your actual TripAdvisor ranking — giving you the edge over local competition.' Paid inclusion seems likely at TripAdvisor, but it’s hard to discern if it’s happening."
Given Nextag's CEO's piece in the Wall Street Journal, Sullivan felt that company's practices were worth an article on their own. In that, Sullivan says "all his arguments can be neatly turned back against Nextag."
The FTC, of course, already has its eye on Google, and while Sullivan's letter calls for a specific area for the organization to keep its eye on, the letter shouldn't do too much to hurt Google's case as far as competition goes, considering the examples Sullivan points to from its competitors.
Google's co-founders Larry Page and Sergey Brin will be questioned by regulators, according to recent reports.
Update: Greg Sterling makes an interesting point about Sullivan's letter, saying that his discussion of disclosing/labeling paid results "is a potential solution to Google's problem in Europe."
This is in reference to the European Commission's "concerns" about Google," which it has given the company until July 2 to address.
Assuming Google wanted to settle, Sterling says, "it could offer to label its own content in search results, as it does with ads."