FTC Investigates X for Ad Label Omissions and Revenue Share Disputes

    FTC Investigates X for Ad Label Omissions and Revenue Share Disputes:- X may come under the scrutiny of the FTC due to the absence of proper advertising labels, and at the same time, content creators are expressing dissatisfaction regarding discrepancies in ad revenue sharing.

    FTC Investigates X for Ad Label Omissions and Revenue Share Disputes

    X’s ad delivery system appears to be experiencing some technical issues, which could potentially pose significant challenges for the X team.

    Amid owner and CTO Elon Musk‘s ongoing public dispute with the Anti-Defamation League (ADL), users have noticed that numerous X advertisements are being shown within streams without the necessary “Ad” label. Additionally, certain X Premium subscribers have reported not seeing any ads on their profiles, thereby restricting their ability to earn ad revenue

    Regarding the initial problem, as TechCrunch has reported, a significant number of X advertisements are currently being exhibited without the recently revised “Ad” indicator, potentially putting them in violation of FTC regulations.

    According to TechCrunch:
    “In our examinations, we encountered several ads without labels from accounts we weren’t following. In fact, the sole indication that they were advertisements was revealed by clicking on the three-dot menu at the upper-right corner of the post. Upon clicking this menu for an ad, users are presented with various engagement options, such as ‘Not interested in this ad’ or ‘Why this ad?’ along with tools to follow the account, mute it, block it, and more.”

    Many users have reported a similar experience, which could potentially escalate into a significant problem for the app if the FTC decides to investigate

    As you might remember, in July, X initiated a shift in how it designates its advertising displays, moving away from the previous “Promoted” labels to a smaller “Ad” disclosure positioned at the top right corner of the post.

    The intention behind this alteration is to create a more seamless integration of ads within the content stream, but it might also potentially violate the FTC guidelines regarding sufficient disclosure of paid promotions.

    According to FTC requirements, all advertisements must be presented in a manner that is “clearly and conspicuously” noticeable within digital applications. In a prior version of the regulations, the FTC used the term “clearly and prominently.” It’s possible that X’s new “Ad” labels align with this revised definition. However, the FTC maintains that both definitions are still applicable, which suggests that X’s smaller “Ad” labels may not be prominent enough, depending on the Commission’s interpretation.

    FTC Investigates X for Ad Label Omissions and Revenue Share Disputes

    So, how does this relate to X’s current issue of missing ad labels?

    Up until now, X appears to have evaded FTC scrutiny concerning this change, but this could be because the FTC is awaiting an official complaint. This implies that perhaps X has only been able to use these less conspicuous labels because the FTC hasn’t actively investigated them yet. If this new problem is brought to the Commission’s attention, it could potentially subject all aspects of X’s ad display practices to closer examination.

    It’s difficult to argue that a small, faint, two-letter label in the top right corner of a post qualifies as “clear and conspicuous” labeling.

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