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X’s Sneaky New Ads Might Be Illegal

Oct 13, 2023 12:22 PM

X’s Sneaky New Ads Might Be Illegal

Experts say a new advertising format on the platform formerly known as Twitter is misleading for users and could fall foul of FTC rules.

An X sign on the roof of the headquarters of the social media platform previously known as Twitter in San Francisco on...

Photograph: JOSH EDELSON/Getty Images

Last week, Mashable reported that on X (formerly Twitter), users were noticing a new type of advertisement: Minus a regular handle or username, the ad’s headline looks like a normal tweet, with the avatar a miniature of whatever featured image appears in the body of the post. There is no notification in the upper right-hand corner saying “Ad,” and users can’t click on the ad to see more about who paid for it.

“Dude what the fuck is this I can’t click on it there’s no account name there’s no username I’m screaming what the hell it’s not even an ad,” one user tweeted. But Twitter’s new ad interface may be more than just annoying—it may be illegal.

Under Section 5(a) of the US Federal Trade Commission Act, companies are banned from using deceptive ad practices, meaning consumers must know that ads are, well, ads. For social platforms, this means that any native advertising, or advertising designed to look like content on the platform, needs to be clearly labeled.

“There’s really no doubt to us that X’s lack of disclosure here misleads consumers,” says Sarah Kay Wiley, policy and partnerships director at Check My Ads, an ad industry watchdog group. “Consumers are simply not able to differentiate what is content and what is not paid content. Even I’ve been duped, and I work in this space.”

X did not immediately respond to a request for comment.

X has two feeds, a Following feed that is meant to show users content from accounts they follow and a For You feed that includes algorithmically recommended content from across the platform. Wiley says she has seen examples of this unlabeled ad content in both feeds. What’s more confusing is the fact that some other content is still labeled as ads. “It’s really egregious because some ads are still marked as ads,” says Wiley. “It really provides opportunities for fraudulent marketers to reach consumers.”

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An FTC staff attorney with the agency’s ad practices division, who spoke to WIRED on condition of anonymity, says that the agency encourages platforms to use a consistent format for advertising disclosures in order to avoid confusing customers.

And Wiley says that if advertisers think X is doing the work of labeling their content when it’s not, they could also face compliance issues for not properly disclosing that their posts are ads. “The advertisers themselves are also victims,” she says.

It’s no secret that X has been scrambling to bring in ad revenue. After Elon Musk took ownership of the company, he publicly declared that it would roll back content moderation efforts and fired much of the staff responsible for this work. Brands, worried that their ads would appear next to disinformation or hateful content, began abandoning the platform. Musk has tried to turn the ship around, bringing in CEO Linda Yaccarino, an experienced advertising executive (who Musk has repeatedly undermined, acting in ways that go against her promises to make the platform safe for advertisers). But recent data shows that the platform has seen a 42 percent drop in ad revenue since Musk’s takeover. X has also begun selling ads via Google Ad Manager and InMobi, a marked shift from its historical practice of dealing with advertisers directly.

And it gets even more complicated—and thorny—for X. In 2011, then-Twitter was issued a consent decree, which would allow the government to take legal action against the company for not safeguarding user data, thereby making it vulnerable to hackers. As part of the settlement with the FTC, “Twitter will be barred for 20 years from misleading consumers about the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information,” the FTC stated at the time.

Showing users ads that they don’t know are ads would likely put the company in violation of this agreement, says Christopher Terry, associate professor of media law at the University of Minnesota.

“The whole point of putting native advertising is to slap a cookie on your computer that then makes you subject to all kinds of horrific other advertising,” says Terry. If X collects data from clicks on content that users don’t know are ads, that’s likely a violation of the company’s agreement to protect user data—and the consent decree, he says.

While it’s likely that the FTC could have grounds to come after X, Terry says he’s not sure the agency will prioritize the platform, noting the agency’s current focus on antitrust actions against Google and Amazon. In May, however, the agency ordered several social media companies, including X, to disclose how they were keeping fraudulent ads off their platforms. And Terry says that if the FTC decides to pursue X, Musk and his company could be in real trouble.

“You can screw with all these people. You can put up all this white supremacist content you want, but you really don’t want to mess with the FTC,” says Terry. “Because if they come knocking, you’re going to be really sorry you bought this company.”

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Vittoria Elliott is a reporter for WIRED, covering platforms and power. She was previously a reporter at Rest of World, where she covered disinformation and labor in markets outside the US and Western Europe. She has worked with The New Humanitarian, Al Jazeera, and ProPublica. She is a graduate of… Read more
Platforms and power reporter

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