FTC Complaint Filed Against X (Formerly Twitter) Over Unlabeled Ads
Watchdog Alleges Deceptive Advertising Practices on Social Media Platform
A prominent advertising watchdog has escalated concerns about X’s (formerly Twitter) advertising practices by filing a formal complaint with the U.S. Federal Trade Commission (FTC). The complaint centers on the platform’s failure to properly label advertisements, potentially misleading millions of users.
Key Issues in the FTC Complaint
- Unlabeled ads appearing in user feeds without proper disclosure
- Broken ad-targeting explanation links that fail to provide required information
- Potential violation of FTC’s Section 5 regarding unfair/deceptive practices
- Possible breach of 2022 settlement terms where X paid $150 million for privacy violations
The Growing Controversy Over X’s Ad Practices
Independent nonprofit Check My Ads initiated the complaint after documenting what it calls “widespread” issues with X’s advertising system. The organization reports receiving hundreds of user-submitted examples showing:
- Ads appearing without “Promoted” or “Ad” labels
- Unlabeled advertisements in the “Following” timeline (traditionally reserved for organic content)
- Inconsistent labeling formats across mobile and web platforms
“This misrepresentation tricks users into trusting content as organic and exacerbates the opportunity for scams to occur,” states the official complaint.
Platform Changes Raise Red Flags
X has undergone significant changes to its ad labeling system:
- Previously used “Promoted” tags
- Transitioned to “Ad” labels
- Now shows some ads with no identification at all
TechCrunch and other outlets verified these findings in September 2023, discovering unlabeled ads that only revealed their paid nature through hidden menu options.
Why This Matters for Users and Advertisers
- Consumer trust: Undisclosed ads may violate FTC truth-in-advertising standards
- Creator payments: Revenue-sharing program could be affected if ads aren’t properly tracked
- Political implications: Concerns mount as X prepares to reinstate political ads for 2024 elections
Legal and Financial Repercussions
This complaint comes at a challenging time for X, which has seen:
- 60% drop in U.S. ad revenue (per Elon Musk’s September 2023 statement)
- 56% decrease in company valuation over 12 months (now at $19 billion)
- Previous $150 million FTC settlement for privacy violations
“We make the argument that this is a violation of not only Section 5 of the FTC Act, but also of that previous consent decree,” explained Sarah Kay Wiley of Check My Ads.
What Happens Next?
The FTC may take months to decide whether to investigate. If found in violation, X could face:
- Substantial financial penalties
- Mandated changes to its advertising systems
- Increased regulatory scrutiny
X has not responded to requests for comment regarding the complaint. The full FTC filing is available for public review.
For ongoing updates on this developing story, follow our technology regulation coverage.
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