CNET: Are search engines confusing surfers?
CNET's Stefanie Olsen reports that the FTC is concerned about paid inclusion. This concern goes above and beyond concern about paid placement. The FTC and others are apparently concerned that the marketers paying to have their pages included in the index on a CPC basis are misleading searchers.
There is also an implication that inclusion may result in lower quality search results. The article even states that "Google delivers unbiased search results from a vast index of Web sites; the company does not accept fees for cataloging sites."
Those of us in the industry know that just because some result is both algorithmic and unpaid (to the search engine), that does not mean the result is unbiased. Marketers pay organic search engine optimization (SEO) consultants and firms hundreds of thousands of dollars or more to make their sites search engine friendly and to do online link popularity campaigns to increase rank. There is always a bias in any system.
One could even make a very strong argument that pay-per-click paid inclusion improves relevance. Once a marketer is paying by the click, they don't want untargeted traffic, or position for a poor quality click, so they will remove paid inclusion listings that the searcher finds irrelevant (by not buying). In organic SEO, there is no such motivation.