• by Wendy Davis  @wendyndavis, November 15, 2023

X Corp. deceives users as well as advertisers by failing to clearly label ads on the social platform X (formerly Twitter), the nonprofit watchdog Check My Ads alleges in a new complaint filed with the Federal Trade Commission.

The organization is asking the FTC to require the company to clearly disclose all ads, and post information about prior ads -- including who paid for them and how they were targeted.

“X Corp.’s non-disclosure of advertisements is inherently deceptive,” the watchdog writes, adding that the company doesn't include disclosures on video as well as static ads.

“Frequently, no text-based labels appear to the user, thus misleading them to believe the posts are organic, non-paid content,” the complaint alleges.

The complaint comes several months after reports surfaced that X had stopped placing the disclosure “promoted” at the bottom of the ad.

Earlier this year, X moved the disclosure to the upper-right corner and used the word “ad” instead of “promoted,” according to the complaint. That upper-right corner also had three dots that users could click on to learn more about the ad -- including why it was being shown to them.

By September, some ads allegedly were no longer labeled. Users could still click on three dots in the upper right corner to learn that the posts were ads, but the link for more information “frequently returned an error message or a blank screen,” according to the complaint.

Check My Ads also claims X Corp. deceives advertisers, writing that the company's promotional material “includes visuals that advertisements will include a 'Promoted' label.”

The group adds that promotional material for X Amplify video ads show a text-based label stating “video will play after ad,” or a “Promoted” label in the lower-left corner, or both.

“These labels are not included in the final product,” Check My Ads writes. “X Corp.’s failure to communicate the lack of disclosure to advertisers poses a reputational harm and is a deceptive practice.”

Check My Ads alleges that its own “informal” review found that some pre-roll video ads on X were missing the “promoted” label as well as text that was supposed to tell users a video would play after the ad.

“These in-post disclosures do not appear and there is no indication a post is an ad while the video plays,” the organization writes. “The lack of disclosure misleads users to believe that the posts are non-paid and organically appearing in their timelines for other reasons such as following an account.”

The FTC has previously said companies that show ads to users should distinguish between paid ads and organic content. In 2013, the agency warned Google, Bing and other companies that consumers “should be able to easily distinguish a natural search result from advertising that a search engine delivers.”