Drawing the Line Between “News” and Commercial Speech

Panel 3 at the Abrams Institute conference

Moderator:  Terri Seligman – Partner and Co-Chair of the Advertising, Marketing & Public Relations Group, Frankfurt Kurnit Klein & Selz: newsworthiness/editorial value when there’s a commercial component. As an advertising lawyer, thinks of it this way: 1A provides scant protection for false/misleading speech or commercial speech disguised as noncommercial.  But what if the line is challenged? Fake news sites selling things; real sites monetized through affiliate links; influencers.

Paul Safier – Of Counsel, Ballard Spahr LLP: Media/quasi media cases where the court didn’t bite the bullet—looked at speech that could have been categorized either way and called it noncommercial.  First, Daniels v. Fanduel: right of publicity/fantasy sports.  It’s information about real events, monetized in a new way.  Ps argued that it was newsworthy in most contexts but not here: no one is going on these websites to get sports analysis.  Indiana SCt: it’s newsworthy in a newspaper so it’s newsworthy here.

EDPa: GoLo LLC v. Hyatt: A genre—consumer review sites, 1-3 people w/no real editorial staff.  Can be very lucrative if you use SEO.  You can buy traffic, not just w/keyword ads, if you’re clever about how you frame your reviews, you can ensure you’ll be a top result when people search for whether X diet works.  Vary in how they monetize, but some have affiliate relationships. Almost all use Google AdSense for clickthrough ads, using algorithms based on searches.  So Google will show ads for competitors next to review for a particular diet, though the site had no control over which ad was placed. 

P’s theory: this isn’t a real review website, but fake, and thus not entitled to protection. Strong theory: website itself was really just an undisclosed commercial site (which sometimes happens, but not w/his client).  Judge rejected that theory as inadequately pled under Twiqbal. Weaker theory: nothing valuable, newsworthy, editorially protected, so it was pled there was no research or analysis in reviews, which conveyed no useful information at all but were just monetizing SEO.  Court rejected that theory too, accepting it as accurate description: even if there was nothing valuable on the sites and they were just clever SEO, that wasn’t commercial speech—they’re still marketing the speech, not marketing a separate product.

Geitech East Bay v. Lutron, SDNY case: coming from a press release about a lawsuit.  One company sued the other for patent infringement & issued a press release about it.  IP claims were dismissed & defendant counterclaimed for false advertising based on the press release.  Court disagreed: it wasn’t commercial speech b/c there were no buying terms in the press release.  [I read this case mostly as about Lanham Act “advertising or promotion” but there’s undeniably a commercial speech component.]

Another case, involving songs sold as being by Michael Jackson that allegedly weren’t: descriptions of songs/who performed the music aren’t commercial speech b/c there’s a controversy about whether it was really Michael Jackson performing. Obviously, that conflicts w/Kasky v. Nike on its face.  Better argument: in Nike, speakers knew the right answer—they knew that they weren’t complying w/labor practices.  Jackson is dead, and the speakers don’t know for sure; though this looks like a factual representation about product, this is a disputed thesis about a matter of historical fact and thus shouldn’t be considered commercial speech.  [This doesn’t help distinguish Kasky, where the practices at issue were carried out by subcontractors; what does help distinguish Kasky is that the underlying work being sold is expressive and therefore the protections given to expressive works can reasonably be extended to advertising that merely repeats the content of the underlying work.]

Seligman: a different case on affiliate advertising came out differently. What were the differences?

Safier: relations w/somewhat loosely related products weren’t enough—no relation b/t specific content of challenged speech and the products they were affiliated with, though reviews of those products w/which site had business relationship might be commercial speech.

Mary Engle – Associate Director, Division of Advertising Practices, Federal Trade Commission

Newsworthiness is not the axis we use to identify commercial speech, though it could play a role.  FTC challenged an RJR issue ad on cigarettes and science; FTC Commission overruled ALJ and found it to be commercial speech. Pom Wonderful: also looked at multiple factors about what constituted commercial speech.  Settlement with ADT, which paid experts to promote its security system in media interviews and online; FTC challenged misrepresentations as independent expert. Inside Publications/Creaxion: publisher ran advertorials and social media promoting FIT Organic mosquito repellant, pursuing to agreement w/PR firm promoting FIT Organic.  Got some athletes to highlight that, without disclosure, as part of a regular feature in the magazine. Magazine did label other paid ads as advertorials. Challenged as misleading.  Discussed Olympians’ use of repellant to avoid Zika virus, so there was a newsworthiness hook, but it was marketing.  Similar acts on athletes’ social media. 

Business Guide: Sponsored non-promotional article where it’s not promoting sponsor’s product doesn’t need disclosure, by contrast.  You don’t even have to say “presented by” to avoid FTC scrutiny, but we expect that they will b/c otherwise it’s not getting exposure.  Another example: redistribution of third party review using 3d party widget on magazine site: the article itself isn’t commercial speech, but redisseminated is advertising and the advertiser is responsible for product claims communicated by the article and if the redissemination is presented in a way that misleads consumers to believe that the magazine endorses the advertiser’s product, that is not ok.

Review sites: FTC has challenged sites that were indeed fake, distinguished in the GoLo decision: shams where advertisers create a review site to review all products but magically find that theirs is the best.  That’s not hard (and the courts agree, though Safier interjects to say that a big Q is how you have to plead this).

Seligman: NAD is fearless about bringing cases against publishers, while FTC seems more reticent.  Hypothetical: were a network or publisher to be aware of the paid spokesperson relationship, would that make a difference into whether that entity could be subject to an enforcement action for nondisclosure?

Engle: would depend: if it wasn’t being paid, then that wouldn’t concern us. If the publisher was being paid, that’s Inside Publications: the publisher was formatting the ad to look like editorial content; it wasn’t being held liable for being a publisher but for acting like an ad agency. 

Seligman: so, less relevance to a talk show.

Engle: yes.

Rhonda Powell - General Counsel, Buzzfeed

NAD case: Says nice things about NAD inquiry. We have shopping guides, and anyone who visits knows that we make lists.  Among those lists are often things you might want to buy, or places you might want to travel.  Inquiry involved shopping guides, especially a review of a moisturizer.  Underlying assumption: something in a list has been positively reviewed. Separately, once the decision had been made to include the product, our sales force reached out and said to the manufacturer: would you like us to include a link to purchase your product at the end of the review.  Manufacturer said yes. They don’t do that for free.  Did the link inclusion convert it from editorial content to commercial speech.  Conclusion: No.  Many reasons, including that there was no specific call to action in the guide itself for someone to buy. The link was included as a convenience but there was no requirement for access to the info or otherwise to buy the product, or that you use that link to buy the product—it was widely available. The person who chose the product for review and reviewed it had no relationship to and no knowledge of the decision to include the link, which was separate and after. A different decision would’ve been rough on us financially; we take pride in having our reviews accurately represent the views of our editorial staff.

Seligman: this was a relatively easy case for NAD b/c Buzzfeed could prove separation of church and state.  One of the things NAD said was that it found that the primary economic motivation was editorial content, but if a publisher created content w/intent to motivate consumers to buy through affiliate links, that could be advertising w/in NAD jurisdiction b/c it’s like other advertising.  If intent is what matters—is that really so different from ordinary ad-supported content creation?  You create shopping guides knowing you will create affiliate links.  Buzzfeed can separate church & state but will a 1 person shop be able to do that?

Safier: if they place all your ads through Google, they have no control/a mechanical way to create separation of church & state. Many of them are unsophisticated—they slept on this mattress & it was great!  Those claims have to be sincere, but they aren’t scientific.

Question: does newsworthiness require utility to the public?

[Newsworthiness seems like the wrong axis for falsity/misleadingness regulation of commercial speech and Bolger I think clearly so indicates. Newsworthiness is much more useful for privacy claims and anything else that purports to extend its coverage to noncommercial speech.]

Seligman: Right of publicity concerns: publisher doesn’t want its content to be deemed commercial so it can write about celebrities, but the division isn’t quite the same when it comes to false/misleading advertising.