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In a Federal Trade Commission notice published last week, the agency warned the advertising industry that penalties could be coming for the use of deceptive endorsements.  The FTC not only released the notice, but it also sent a letter (a version of which is available here) to hundreds of businesses (a list is here) – advertisers, advertising agencies, and a few media companies – reminding them of the FTC’s concerns about deceptive endorsements in advertising.  While the FTC makes clear that this list of recipients of the letter does not indicate that any of them did anything wrong, it does make clear that the FTC takes this issue very seriously and wants to highlight the issue for the entire advertising ecosystem.  The letter reminds businesses that violations can lead to fines of up to $43,792 per violation and other penalties.

What are the FTC concerns?  The FTC said that prohibited practices “include, but are not limited to: falsely claiming an endorsement by a third party; misrepresenting whether an endorser is an actual, current, or recent user; using an endorsement to make deceptive performance claims; failing to disclose an unexpected material connection with an endorser; and misrepresenting that the experience of endorsers represents consumers’ typical or ordinary experience.”  In other words, when an endorser says something about a product, the FTC is expecting that the endorser used the product and the statements that it makes about the product are accurate and reflect what consumers can expect from that product.  This is not the first time that the FTC has raised these issues.
Continue Reading FTC Reminds Advertisers That Deceptive Endorsements in Advertising Can Lead to Penalties

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The Federal Trade Commission issued a press release which warns advertisers to avoid misleading endorsements. The FTC also sent a

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A recent controversial court of appeals decision on a defamation claim brought by Congressman Devin Nunes sends a signal to broadcasters about the care they need to give to reviewing commercial messages – particularly political attack ads – when questions are raised as to the truth of the assertions made in those ads.  As we have written before, broadcasters are immune from civil liability for defamation claims when they broadcast an ad from the campaign of a legally qualified candidate, as a station cannot censor a candidate ad.  Because broadcasters must transmit the ad as produced, they are immune from liability for its content.  But ads from non-candidate groups, including political parties and PACs, can be censored by stations – so stations that decide to run such ads are subject to liability for their content.  Under Supreme Court precedent, defamation of a public figure (like a political candidate) is found when material is transmitted to the public that is false and results in injuries to the candidate plus, unique to public figures, the ad was transmitted with “actual malice.” Malice means that it was transmitted either knowing that the ad was false or having reason to believe that it was false.  See our article here about the analysis of this issue in other cases.  When a broadcaster receives objections alleging that content in the ad is false, it can be argued that the station has been put on notice that it has an obligation to assess the truth of the ad, and thus would need to take it down if the ad includes defamatory claims being made.

We recently wrote about the opinions from two Supreme Court justices suggesting that it should be easier for public figures to prove defamation claims. The case that led to the recent court of appeals decision began when Congressman Nunes brought a defamation lawsuit in response to a magazine’s publication of allegations that his family’s farm used illegal migrant labor and suggested that his political positions against immigration were thus hypocritical.  That lawsuit urged the same change in defamation law suggested in the Supreme Court opinions, and also alleged that the implications in the article were false, as Nunes know nothing about the migrant laborers.  A few months later, a reporter tweeted a link to the article, suggesting that his twitter followers look at the allegations in the article.  While the court found that the article itself was not defamatory (since the publisher had no reason to believe the information in the article was false at the time of publication, and thus acted without malice), it also found that the reporter’s tweet was potentially defamatory since, after the article was published, Nunes had filed his lawsuit against the magazine claiming that the article’s suggestion that he knew about the illegal workers was false.  The court held that a summary decision in favor of the reporter was not proper, finding that a jury could determine that the reporter’s tweet was defamatory even though the underlying article was not, as the tweet came after the claim by Nunes that he knew nothing about the illegal workers.
Continue Reading Defamation by Tweet – Court Case Reminds Broadcasters to Take Cease and Desist Requests about Attack Ads Seriously

We are nearing the end of September and, in many jurisdictions we are in the heart of political season – though mostly for state and local elections. While most broadcast stations don’t think much about the FCC’s political broadcasting rules in odd-numbered years, they are required to do so, as races for state and local political offices trigger most of the same FCC obligations as do races for federal office.  There are particularly hard-fought elections for Governor in November in Virginia and New Jersey, and all sorts of state and local elections around the country.  These include some mayoral races in major US cities.  Thus, it is worth repeating the reminders that we have published before: most of the political rules apply to these state and local electoral races so broadcasters need to be paying attention.

Whether the race is for Governor or much more locally focused, like elections for state legislatures, school boards or town councils, stations need to be prepared. Candidates for state and local elections are entitled to virtually all of the political broadcasting rights of Federal candidates – with one exception, the right of reasonable access which is reserved solely for Federal candidates. That means that only Federal candidates have the right to demand access to all classes and dayparts of advertising time that a broadcast station sells. As we wrote in our summary of reasonable access, here, that does not mean that Federal candidates can demand as much time as they want, only that stations must sell them a reasonable amount of advertising during the various classes of advertising time sold on the station. For state and local candidates, on the other hand, stations don’t need to sell the candidates any advertising time at all. But, if they do, the other political rules apply.
Continue Reading Remember – Political Ads for State and Local Races Trigger FCC Political Obligations

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC opened the window for Fiscal Year 2021 regulatory fees which must be paid no later than 11:59 pm,

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Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • In the run-up to the August 11 National EAS Test, the FCC released a Public Notice reminding broadcasters to ensure

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Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The four television network affiliates groups have asked the FCC to clarify its new rules for sponsorship identification of programming

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Last week, it was announced that the FCC would be considering some changes to its political broadcasting rules at its monthly open meeting in August.  In some quarters (see, for example, this article), that raised concern that significant changes were coming in time for the 2022 Congressional elections.  But, when the draft of the proposed changes was released last week, it turned out that the changes were instead very minor – almost ministerial.  The proposed rule changes revise the Commission’s rules on two matters that are already part of the practices of stations and the lawyers who advise them on political broadcasting matters.  Two changes are being proposed – one dealing with the showing that needs to be made by a write-in candidate to show that the candidate is “legally qualified” and entitled to take advantage of the FCC’s political broadcasting rules, and the second being just a rule change to conform FCC rules to statutory requirements that broadcasters include, in their online public files, information about the sale of advertising time to non-candidate buyers who convey a message on a matter of national importance, i.e., a federal issue ad.

The first proposal would add use of social media and creation of a campaign website to the factors specified in the rules as factors to consider when determining if a write-in candidate has made a “substantial showing” of a bona fide campaign for office so that they can be considered a “legally qualified candidate.”   Legally qualified candidates, even write-ins who have made this substantial showing, are entitled to all the protections of the Commission’s political rules, including equal opportunities, lowest unit rates and, for candidates for federal office, reasonable access to buy advertising time on commercial broadcast stations.  Looking at the online activities of an alleged candidate has already been part of the evaluation of whether write-in candidates have made a substantial showing of a “bona fide candidacy” – one demonstrating that the write-in candidate was conducting a serious campaign for office entitling them to the protections of the political rules.  Just saying that you are a write-in candidate is not enough to qualify for protections under the FCC rules – a write-in candidate must also show that he or she is really conducting a serious campaign for office (see our article here).  The facts set forth in that showing determine how serious the campaign is.  Since the FCC’s list of activities in its rules is illustrative and not exhaustive, and since online activities are indicative of how serious a candidate is, stations were already reviewing online activities when assessing substantial showings.  The FCC’s proposal would just make sure that what is already being done is spelled out in the rules.
Continue Reading FCC To Clarify Political Advertising Rules – No Significant Changes Proposed

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • The FCC’s Video Division of its Media Bureau has begun to release decisions on TV license renewal applications filed in

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Last week, we wrote about two dissenting opinions in a Supreme Court decision that highlight the debate that is underway on the principles that govern defamation liability in the United States.  While we are reviewing Supreme Court decisions that could have an impact on broadcasters, including on political advertising, we thought that we should highlight another decision of the Supreme Court, a case called Americans For Prosperity Foundation v. Bonta, Attorney General of California, that could have an even more direct effect on the political advertising disclosure obligations of broadcasters.  In that case, the Court struck down a California requirement that charities operating in California reveal to the state their major donors.  Even though the state was supposed to keep this information confidential, the Court felt that the potential for disclosure of the contributors to groups dealing with controversial issues could chill their willingness to donate to the charitable groups, due to fears of repercussions should their donations become public (thus, in effect, creating a restraint on their First Amendment right to free association).  But could this decision have a wider impact on First Amendment rights and potentially affect disclosure obligations about contributions used for political advertising?

At least one commentator, George Will, seemed to think so.  In a column that he wrote last week, he suggests that supporters of the DISCLOSE Act (we wrote about a similar bill introduced 5 years ago here) should be worried  about its constitutionality in light of this Supreme Court decision.  If creating fears about the repercussions of donations to charitable organizations is seen as constitutionally suspect, a court could draw a similar conclusion about donations to political speech organizations.  The Supreme Court’s decision does acknowledge that the government could justify narrowly tailored disclosure obligations that advanced an important government interest, and the Court has, in the past, upheld disclosure obligations for contributors to political campaigns.  But would today’s Court see things the same way?  Would it make distinctions between disclosures of donations directly to campaigns (which have been upheld in the past where they could be seen as being linked to an attempt to buy influence with a candidate) versus  donations to third-party organizations that may engage in political speech, including support or opposition to candidates, which the Court might view  as the donors exercise of its free speech rights (as were the political expenditures by corporations in the Citizen’s United case – see our articles here and here)?  Time will tell how the ramifications of the Court’s decision will play out.
Continue Reading Could a Supreme Court Decision Affect Disclosure Obligations on Political Advertising?