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Indian startups urge government to regulate ads on Google

The lack of regulations is said to have let scammers fly under the radar.

Google

“In a recent incident, fraudsters have been advertising numbers disguised as customer support numbers of a large company (Mobikwik) on Google. The top result of a Mobikwik helpline number is actually a fraudulent link meant to scam help seekers. The scamsters ask for UPI transfers or send UPI pull requests from handles that seem like they belong to the main brand,” the Alliance of Digital India Foundation (ADIF), an alliance of over 500 Indian start-ups, said in a letter sent to the Ministry of Electronics and Information Technology (MeitY) on May 12.

“Fraudulent advertisements on popular search engines and social media platforms have come up as the latest way of online scams. […] The absence of adequate regulation of false advertisements is a matter of concern. As representative of startups, I would like to request you to look into the issue urgently as it concerns the entire startup ecosystem and the safety of Indians on the internet,” ADIF wrote.

Concerning that Google profits from ads causing financial loss and mental stress

ADIF said that it is concerning Google and other tech firms charge hefty fees to host fraudulent ads and make profits from them. It also pointed out that these scams not just cost financial losses but also put “sheer mental stress and trauma” on lakhs of Indians yearly. “All of this happening swiftly in the ecosystem of big tech firms makes it even more concerning. These fraudulent ads contribute majorly to the revenue of these firms while exposing users to high risks,” ADIF stated.

“The blatant misuse of their platform by big tech firms is going unchecked and Indian citizens are paying a price for it – what is more is that the tech giant is using this to make profits.” – Sijo Kuruvilla George, Executive Director of ADIF

Google has specific policies to prevent such advertisements, and in 2020, Google launched the advertiser identity program, requiring advertisers to verify their legal name through authorised documents. But these policies have clearly not been as effective as they should be.

How bad is this problem?

Digital ads are not regulated by the Indian government, and social media platforms have little incentive to turn down ad revenue. Last year, we reported on how predatory loan apps in India benefit from this status quo. To lure unsuspecting borrowers, predatory lending apps advertise on popular social media platforms like Youtube, Facebook, and Instagram. Ads for these apps have even appeared on apps like Truecaller and Zomato (through integrations with the Facebook Audience Network and Google Ads).

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Pugalyendhi Gautham from SaveThem India, a foundation started in March 2020 to counter the lending apps problem in India, told us that in the first 16 months of its existence, the foundation received over 55,000 calls from victims of harassment by agents of lending apps.

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