On Thursday, the U.S. Federal Trade Commission (FTC) directed eight major social media and video streaming companies, including Meta Platforms, Twitter, TikTok, and YouTube, to provide information on their practices for screening misleading advertisements.
Other companies included in the inquiry are Snap, Twitch (owned by Amazon), Pinterest, and Instagram. These firms are expected to furnish data such as ad revenue and viewer counts, specifically in product and service categories that are more likely to be associated with deceptive advertising.
As of now, the companies have not yet responded to requests for comments from Reuters.
The FTC aims to investigate and limit paid advertisements that are misleading or that present consumers with fraudulent healthcare products, financial schemes, counterfeit items, or other forms of fraud.
“Social media has become a lucrative platform for fraudsters promoting bogus products and scams that have led to significant losses for consumers in recent years,” stated Samuel Levine, the director of the FTC’s consumer protection bureau.
Levine emphasized that this investigation will assist the FTC in ensuring that social media and video streaming platforms are implementing adequate measures to prevent scammers and deceptive advertisements from appearing on their sites.
This latest order follows a previous request from the FTC to Twitter for internal communications related to its owner, Elon Musk, along with comprehensive details regarding business decisions related to an ongoing investigation.
Last month, the FTC announced its decision to withdraw an antitrust lawsuit opposing Meta Platforms’ acquisition of virtual reality startup Within Unlimited, thereby officially closing the case. The lawsuit was filed by the FTC the previous year, with two complaints lodged in both federal and in-house courts. A trial that took place in December in a federal court in San Jose resulted in U.S. District Judge Edward Davila ruling in favor of Meta, concluding that the FTC failed to present sufficient evidence to prove the acquisition would negatively impact competition in the emerging virtual reality industry.
© Thomson Reuters 2023
