FTC to require social media companies to explain policies on fraudulent, deceptive advertising

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FTC social media advertising requirements overview: 

• Who: The Federal Trade Commission has unanimously voted to require Meta, TikTok, Twitter, Instagram, YouTube, Snap, Pinterest and Twitch Interactive to disclose how they are policing deceptive advertising found on its platforms. 
• Why: The commission said it is making the request upon mounting evidence that the platforms for the social media and video streaming companies have become a “significant vector” for financial scams, misleading ads and other cases of fraud.
• Where: Nationwide.

The Federal Trade Commission (FTC) has unanimously voted to require Meta, TikTok, Twitter, Instagram, YouTube, Snap, Pinterest and Twitch Interactive to explain how the social media video streaming companies police deceptive advertising on their platforms.

The commission — in a 4-0 vote — made its requirement despite concerns by its outgoing Republican commissioner that the social media companies would not have the resources to be able to properly respond to such a request, Law360 reports. 

The social media companies and video streaming platforms, meanwhile, have reportedly been asked to provide the FTC with details on how they monitor, review and restrict paid commercial advertising it determines to be deceptive. 

Deceptive advertising refers to anything that could expose users to financial scams, fraudulent health card products or fake or counterfeit goods or services, among other things, according to the FTC, Law360 reports. 

The commission also reportedly asked the social media and video streaming companies to explain how they help their users distinguish commercial advertising from other content posted on their platforms. 

FTC making order of social media, video streaming companies under FTC Act, it says 

The FTC said it was making the order under the authority of Section 6(b) of the FTC Act, which gives the commission permission to conduct studies about certain industry practices, Law360 reports. 

FTC Commission Chair Lina Khan, meanwhile, said the decision to require the companies to describe how they are policing their platforms is important among evidence they are becoming a “significant vector” for cases of fraud, financial scams and misleading ads.

“Given these broader trends, it’s important for us to be understanding why fraud in particular is proliferating on social media and if there are any root causes that the FTC should be addressing,” Khan said, during a public hearing March 16. 

In September, the head of the FTC’s consumer protection bureau warned advertisers that he would not hesitate to assess monetary penalties to those the commission determined were deceiving consumers.

Have you been scammed or defrauded while using a social media or video streaming service? Let us know in the comments! 

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