FTC orders Big Tech to address surge in ads promoting scams and fraudulent products

TThe Federal Trade Commission demanded that the largest social media and streaming companies provide information about how fraudsters and scammers use their platforms for deceptive sales and trading.

The agency sent Thursday’s orders to Facebook, Instagram TikTok Youtube Snap, Twitter, Pinterest and Twitch asking for information regarding their standards in ad screening. Companies were also instructed to report on ad revenues for certain categories like healthcare fraud and fraudulent behavior.

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“Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection made this statement. “This study will help the FTC ensure that social media and video streaming companies are doing everything they can to keep scammers and deceptive ads off their platforms.”

The number of fraud reports has been declining. In 2022, the Consumer Sentinel Network received 2.42 million fraud reports. This is a decrease from 2021’s 2.9million reports.

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In the past term, the FTC has been especially interested in Big Tech companies. The agency has pressed Twitter to probe whether it is complying with a May 2022 consent order and attempted to block Meta’s acquisition of a virtual reality developer — a suit that was shot down by a judge in February.