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X’s Sneaky New Ads Might Be Illegal

In a recent article, it came to light that X (formerly known as Twitter) may be engaging in illegal advertising practices. Users have been noticing a new type of advertisement on the platform that is incredibly misleading. These ads appear as normal tweets with no indication that they are sponsored content, and users cannot click on them to find out more information about the advertiser. This lack of disclosure raises concerns about X violating the US Federal Trade Commission Act, which prohibits companies from using deceptive advertising tactics. Not only does this mislead consumers, but it also creates opportunities for fraudulent marketers to target unsuspecting users. The article explores the potential legal implications for X and the consequences they may face for these sneaky new ads.

X’s Sneaky New Ads Might Be Illegal

X’s Sneaky New Ads Might Be Illegal

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Introduction

In recent weeks, users on X (formerly known as Twitter) have started noticing a new type of advertisement that has raised concerns among experts. These ads, which appear to be normal tweets, lack clear labels indicating that they are ads. This deceptive advertising practice not only confuses users but also potentially violates Federal Trade Commission (FTC) rules. In this article, we will explore the background of X’s new ad format, the deceptive ad practices on the platform, the violation of FTC rules, examples of misleading ads, the inconsistency in labeling, advertiser compliance issues, X’s struggles with ad revenue, the potential violation of a consent decree, and the FTC’s focus on X.

Background Information

As reported by Mashable, X has introduced a new advertising format that mimics regular tweets. Users have observed that these ads lack a clear indication that they are sponsored content and cannot be clicked to see more information about the advertisers. This format not only causes frustration among users but also raises legal concerns regarding deceptive advertising practices.

X’s Sneaky New Ads Might Be Illegal

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Deceptive Ad Practices on X Platform

Under Section 5(a) of the US Federal Trade Commission Act, companies are prohibited from using deceptive ad practices. This means that consumers must be able to distinguish between regular content and advertisements. X’s new ad format fails to clearly label ads, leading to confusion and potentially misleading users. Experts argue that X’s lack of disclosure misleads consumers and violates FTC regulations.

Violation of FTC Rules

X’s failure to appropriately label its new ad format may be a violation of FTC rules. According to Sarah Kay Wiley, the policy and partnerships director at Check My Ads, consumers are not able to differentiate between paid content and regular content. This lack of transparency puts X at odds with the regulations set forth by the FTC to protect consumers from deceptive advertising practices.

X’s Sneaky New Ads Might Be Illegal

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Examples of Misleading Ads

Users have expressed frustration with X’s new ad format, citing difficulties in identifying which tweets are ads and which are not. The absence of a clear indication that an ad is sponsored content can result in users unknowingly engaging with promotional material. This lack of transparency poses a potential risk for users who may interact with ads without realizing that they are advertisements.

Inconsistency in Labeling

One of the most concerning aspects of X’s new ad format is the inconsistency in labeling. While some ads are still clearly marked as such, the new format fails to provide the same level of transparency. This inconsistency opens doors for fraudulent marketers to take advantage of unsuspecting consumers, further highlighting the need for clear and consistent labeling of advertisements on the platform.

X’s Sneaky New Ads Might Be Illegal

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Advertiser Compliance Issues

Not only does X’s new ad format pose risks for users, but it also presents compliance issues for advertisers. If advertisers mistakenly assume that X is appropriately labeling their content when it is not, they may inadvertently violate regulations requiring them to disclose that their posts are ads. Advertisers themselves become victims of X’s lack of transparency, potentially facing legal consequences for non-compliance.

X’s Struggles with Ad Revenue

X has faced challenges in generating ad revenue, prompting changes in its approach to advertising. After Elon Musk took ownership of the company, content moderation efforts were rolled back, resulting in brands abandoning the platform due to concerns about their ads appearing next to disinformation or hateful content. X’s ad revenue has decreased significantly since Musk’s takeover, necessitating alternative strategies to attract advertisers, such as selling ads via Google Ad Manager and InMobi.

X’s Sneaky New Ads Might Be Illegal

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Potential Violation of Consent Decree

Adding to X’s legal concerns is a consent decree issued to Twitter, the company formerly known as X, in 2011. The consent decree was a result of Twitter’s failure to safeguard user data, making it vulnerable to hackers. As part of the settlement, Twitter was required to refrain from misleading consumers about the extent of its data protection measures. X’s failure to clearly label ads, potentially collecting user data without their knowledge, could put the company in violation of this agreement.

FTC’s Focus on X

While the FTC has not explicitly addressed X’s new ad format, the agency has shown an interest in social media platforms and the need for transparent ad practices. In May, the FTC ordered several social media companies, including X, to disclose their measures for preventing fraudulent ads. Although the FTC’s current focus is primarily on antitrust actions against major tech companies like Google and Amazon, X’s deceptive advertising practices could potentially land the platform in legal trouble if the agency decides to pursue the matter.

Conclusion

X’s new ad format, which lacks clear labels indicating that they are ads, raises concerns about deceptive advertising practices and potential violations of FTC rules. Users have expressed frustration and confusion over the misleading nature of these ads. The inconsistency in labeling further adds to the risks for both users and advertisers. X’s struggles with ad revenue, coupled with the potential violation of a consent decree, highlight the need for a closer examination of the platform’s ad practices. While the FTC’s current focus may lie elsewhere, X could face legal consequences if the agency chooses to prioritize this matter. As users and advertisers navigate the platform, it is crucial for X to address these concerns to ensure transparency and compliance with FTC regulations.

Source: https://www.wired.com/story/xs-sneaky-new-ads-might-be-illegal/