The US Federal Trade Commission (FTC) has issued orders to eight social media and video streaming firms, including Twitter, TikTok, and YouTube, seeking information on how they screen for misleading advertisements. The move comes amid rising concerns about paid commercial advertising that exposes consumers to fraudulent healthcare products, financial scams, counterfeit and fake goods, or other forms of fraud. In this article, we’ll take a closer look at what the FTC’s orders entail and what they mean for the social media industry.
The Companies Ordered to Provide Information
The FTC has issued orders to eight social media and video streaming firms. These include:
- Meta Platforms
- TikTok
- YouTube
- Snap
- Amazon.com-owned Twitch
The companies have been asked to provide information such as ad revenue and the number of views, including those in categories of products and services more prone to deception.
The Purpose of the Orders
The FTC’s orders are aimed at scrutinizing and restricting misleading advertisements. The regulator is seeking to ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms. The FTC’s director of the consumer protection bureau, Samuel Levine, said, “Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years.”
Responses from the Companies
The companies ordered to provide information did not immediately respond to Reuters’ requests for comment. However, it is expected that they will comply with the orders issued by the FTC.
What the Orders Mean for the Social Media Industry
The FTC’s orders are likely to have far-reaching implications for the social media industry. The regulator is seeking to protect consumers from being exposed to fraudulent healthcare products, financial scams, counterfeit and fake goods, or other forms of fraud. This means that social media and video streaming companies will need to be more vigilant in screening for misleading advertisements and taking action against scammers.
FTC’s Previous Investigations
The FTC’s orders come after the regulator asked Twitter to turn over some internal communications related to owner Elon Musk and other detailed information about business decisions as part of an investigation earlier this month. In addition, the FTC withdrew an antitrust complaint challenging Meta Platforms’s purchase of virtual-reality startup Within Unlimited, officially closing the agency’s case. The FTC had sued to block the deal last year, but a US District Judge ruled in favor of Meta, stating that the FTC did not offer enough evidence to prove that the acquisition would harm competition in the virtual-reality industry.
Conclusion
The FTC’s orders to eight social media and video streaming firms are aimed at tackling the problem of misleading advertisements. The regulator is seeking to protect consumers from being exposed to fraudulent healthcare products, financial scams, counterfeit and fake goods, or other forms of fraud. The orders are likely to have far-reaching implications for the social media industry, and companies will need to be more vigilant in screening for misleading advertisements and taking action against scammers. It remains to be seen how the companies will respond to the FTC’s orders and what the outcome of the regulator’s investigations will be.
