Google Needs FTC Scrutiny on Stimulus Scams, Democrats Say

(Bloomberg) -- Two Democratic lawmakers urged the U.S. Federal Trade Commission to scrutinize Alphabet Inc.’s Google over online ads that perpetuate alleged frauds regarding pandemic stimulus checks of up to $1,200.

“While advertisers bear the primary legal responsibility for deceptive ads, Google should also face scrutiny for the continued failure to address the known problem of fraudulent actions, especially where it financially benefits from such fraud,” said Representative Jan Schakowsky of Illinois and Senator Richard Blumenthal of Connecticut in a letter to the agency on Tuesday.

The letter represents another layer of concern expressed by Democrats about violent or controversial content on social-media sites, including election misinformation, racist content and other falsities related to the novel coronavirus pandemic.

“The FTC should take action against those behind the fraudulent advertisements, which appear to violate the FTC’s prohibition against unfair or deceptive advertising and other consumer protection rules,” the lawmakers wrote, citing guidance from the agency that third parties may also face liability for deceptive ads “if they participate in the preparation or distribution of the advertising, or know about the deceptive claims.”

Schakowsky, who chairs a House subcommittee on consumer protection, is working on a bill to change Section 230 of the Communications Decency Act to make online platforms face more liability over ads and other commercial speech. Technology companies treasure the provision because it protects them from lawsuits over third-party content.

The law has increasingly become a focus of tech critics. Blumenthal, who spoke during a Tuesday video conference on online misinformation around the virus, said it might be necessary to change Section 230 to address deceptive practices.

Google declined to comment. An FTC spokeswoman, Juliana Gruenwald, confirmed that the agency received the letter but declined to comment further.

The two lawmakers cited an investigation by the Tech Transparency Project, a research initiative of the Campaign for Accountability, a nonprofit watchdog group. The review found that 45 of 126 ads that appeared on Google when consumers used the search engine to find information about the stimulus checks violated the company’s advertising policies.

The investigation, which involved creating a computer code to search Google for phrases such as “IRS stimulus,” and “where is my stimulus,” also found that only of 17 of the 126 ads served by Google linked to official government or intergovernmental organizations.

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