On Friday, the FCC released an Order and Consent Decree by which Journal Broadcasting agreed to pay a fine of $115,000 and to enter into a compliance program to settle complaints that it had not adequately identified that a program aired on its Las Vegas TV station was sponsored by a local car dealership. According to the FCC press release issued at the same time as the Order and Consent Decree, the program was labeled a “Special Report,” was hosted by a station employee who stated that she was “reporting on behalf of Channel 13,” was made to look like a news report (with the reporter interviewing various employees of the dealership about their liquidation sale), and was run immediately adjacent to the local news. The Press Release stated that this action was important to insure “transparency” where consumers are not misled as to who is trying to persuade them about commercial product. “[A] pseudo news report invites viewers to rely on their perception of the station’s independence and objectivity when, in fact, the message has been bought and paid for by an undisclosed third party,” stated the FCC in the press release.
While the licensee argued that the context of the program made clear that it was a sponsored ad, the Commission’s insistence on the payment of a fine here is evidence of much the same thinking as the decisions the FCC has reached in past cases where there was entertainment or informational programming presented without a sponsorship identification even where the programming was sponsored by a commercial entity. Even simply providing a recorded program unduly promoting a commercial product has been found to be sufficient to trigger the FCC’s requirement that a sponsor be identified when a station receives valuable consideration for the airing of a program broadcast to the public (see our article here).
The amount of the fine here, and another settlement several months ago with a radio group that did not specifically identify each sponsor of a program focusing on local businesses (where the program was identified as having been sponsored, but the disclaimer did not change daily to reflect the name of the business being featured on that day’s program and paying for the privilege of being featured), demonstrates the seriousness with which the FCC treats these sponsorship identification violations. While the FCC has had a proceeding pending for many years to clarify the sponsorship identification rules (see our article here), in the absence of any such clarification, broadcasters need to be careful and, when material is broadcast on the air for which the station has been paid or for which it has received consideration, the station needs to be sure that an appropriate sponsorship identification is made so that consumers know that a program that they are watching or viewing is sponsored.