The US Federal Trade Commission (FTC) on Thursday issued orders to eight social media and video streaming firms including Meta Platforms, Twitter, TikTok and YouTube seeking information on how the platforms screen for misleading advertisements.
Snap, Amazon.com-owned Twitch, Pinterest and Instagram are the other companies which are all required to provide information such as ad revenue and number of views including those in categories of products and services more prone to deception.
The companies did not immediately respond to Reuters' requests for comment.
The regulator is seeking to scrutinize and restrict paid commercial advertising that is deceptive or exposes consumers to fraudulent healthcare products, financial scams, counterfeit and fake goods, or other fraud.
"Social media has been a gold mine for scammers who tout sham products and other scams that have cost consumers enormously in recent years," said Samuel Levine, director of the FTC's consumer protection bureau.
"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 order comes after the FTC asked Twitter to turn over some internal communications related to owner Elon Musk and other detailed information about business decisions as part of an investigation earlier this month.
Last month, FTC voted to withdraw an antitrust complaint challenging Meta Platforms's purchase of virtual-reality startup Within Unlimited, officially closing the agency's case.
The FTC sued to block the deal last year, filing twin complaints in federal court and its in-house court. Following a December trial in a San Jose federal court, US District Judge Edward Davila found in favour of Meta, ruling the FTC didn't offer enough evidence to prove that the acquisition would harm competition in the nascent virtual-reality industry.
© Thomson Reuters 2023
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