US advertising industry watchdog Check My Ads has formally requested the Federal Trade Commission (FTC) to scrutinize X (formerly known as Twitter) for what it terms "inherently deceptive" advertising practices.
This development follows the introduction of a new ad format by X in October, which, according to allegations, displays paid posts without adequate labelling, potentially breaching US laws against deceptive advertising.
Sarah Kay Wiley, Policy and Partnerships director at Check My Ads, expressed concerns about the potential rise in scams due to these unlabelled ads.
The complaint highlights issues like the broken hyperlinks in the 'Why am I being targeted with this ad?' feature, complicating users' ability to understand ad targeting and data usage.
Ambiguity faced by advertisers
The complaint by Check My Ads also points out the ambiguity faced by advertisers regarding compliance issues, as X’s promotional materials assert that posts are clearly marked as ads.
The recent integration of third-party ad exchanges like Google (NASDAQ:GOOGL) Ads and InMobi, allowing ads to feature in X's 'For You' feed, adds further complexity to the transparency and traceability of ad spend.
This call for an FTC investigation into X's practices could intensify the challenges for the company, which has already seen a significant decrease in its valuation post-acquisition.
The FTC, holding the discretion to pursue cases based on individual complaints, might consider this request for investigation.
This situation underscores the growing scrutiny and demand for transparency in digital advertising practices.