Alejandro Arrieche
The United States Federal Trade Commission (FTC) is ordering nine of the most prominent social media platforms in the world to reveal how they are actively tackling fraudulent advertising.
According to a press release published yesterday, the regulator is sending letters to Meta Platforms (META), TikTok, Twitter, YouTube, Pinterest, Snapchat, and Twitch, to collect information about their standards and policies for commercial ads.
The companies must provide details including how they monitor and enforce that advertisers are complying with these rules including the use of artificial intelligence and human enforcers to identify potentially fraudulent adverts.
They will also be asked to reveal how much money they make from ads that are prone to be used for deceptive or fraudulent purposes, how many views those get, and how users can inform the platform about incidents involving fraud.
Social Media Fraudsters Ripped Nearly $300M from Consumers Last Year
“These orders will help the Commission better understand how prevalent deceptive advertising is on social media and video streaming platforms, the consumers who may be harmed by that advertising, and the effectiveness of the platforms’ oversight of advertisers, including whether the companies treat English-language and Spanish-language ads differently”, the FTC stated.
According to data from the regulator, last year alone they received a total of 34,539 fraud reports involving total losses of $295 million within social media. This makes these platforms the most profitable individual channel for criminals.
In addition, the percentage of incidents where money was lost was the highest among all channels at 65%.
Also read: 12 Best Spy Apps for 2023 – Cheap Options for All Devices
“The insights from this study will better equip the agency’s enforcement work to protect consumers from deceptive advertising. More broadly, this study would make important progress on the Commission’s efforts to pinpoint the root causes of unlawful conduct in the digital marketplace”, commented the Chairman of the FTC, Lina Khan, in regards to the agency’s study.
According to the letters sent by the agency to the companies mentioned earlier, they will be asked to hand over the following information:
- A thorough description of the digital advertising platforms and services and all of the mechanisms involved in creating an account, setting up an ad, and boosting it.
- The policies and guidelines that advertisers must abide by and how these platforms enforce them and make sure everyone complies with them.
- How complaints from consumers can be sent and how companies process them and inform regulators or authorities about the incidents.
- Information about the revenues generated from certain ad categories that are considered relevant to the study.
The information requested from the FTC will go back to 2019 and up to the date when the companies send over the reports. All of the platforms have 45 days to comply with the agency’s order.
Scammers on Twitter Ran Wild Earlier This Year and TikTok is Facing a Ban in the US
Scammers have been taking advantage of certain events lately to commit fraud on platforms such as Twitter, where confusion during initial efforts to democratize its account verification procedure led to the impersonation of several celebrities.
In addition, the crypto industry has been widely exploited by fraudsters to promote products and projects that have no commercial utility and that function as Ponzi schemes.
TikTok, one of the social media platforms queried by the FTC in this case, has also been under scrutiny lately and is facing the possibility of being banned in the United States due to allegations that the app could be being used as a backdoor by China’s Communist Party to spread misinformation, sabotage the country’s elections, and influence its social agendas.
Legislators from both the House of Representatives and the Senate have been pushing forward bills that could lead to this outright ban of TikTok. Meanwhile, the White House has also prompted ByteDance – TikTok’s parent company – to either spin off the social media platform into a separate business and sell it to a non-Chinese entity or face a ban as well.
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This article was written for Business 2 Community by Alejandro Arrieche.
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