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FEC Announces Internet Rulemaking

The Federal Election Commission (FEC) unanimously approved a Notice of Proposed Rulemaking, beginning the formal process of amending the agency’s regulations on internet political disclaimers.  The proposal and the Commissioners’ comments at the hearing reflect a fair amount of consensus on how to refashion rules that have been the source of significant disputes over the past decade.  Here are a few key points about yesterday’s action.

Moderation Won the Day.  While the draft notice contained two proposals for how to revise existing regulations, they share many common points, making a new final rule more likely.  The two proposals more closely resemble variations on solving a common problem than competing agendas.

Slow and Steady Wins the Race.  Publication of the notice will begin a sixty day comment period, and the Commission plans a public hearing on the proposal June 27, 2018.  Consequently, any new rule will be more relevant in the 2020 races.

Updating the Terms in the Regulations.  All Commissioners seem to agree that the regulatory language needs to be updated from simply referring to “Web sites,” to include terms like “internet-enabled device or application.”

The Scope of the Mandatory Disclosure Has Not Grown.  All Commissioners agree that the new rules will only cover communications that contain express advocacy, solicit contributions, or are paid for by a political committee.  Disclosure will remain limited to the identity of the person paying for the communication and whether it was authorized by a candidate.

The Commission is Open to Suggestions.  In both the formal notice and at the hearing, the Commissioners made clear they were not wedded to specific proposals, and that constructive advice from the public, especially those steeped in the technology, would be welcome.  They specifically cite to whether “internet-enabled device or application” is an appropriate phrase for current and future technologies, and wonder how this rule will apply as political ads move to wearable devices, the “internet of things” and screenless assistants.

“Stand By Your Ad” on the Internet?  One proposal would add the “stand by your ad” written and spoken disclaimers required in TV and radio ads to include video or audio communications on the internet or other digital media.  An alternative proposal would create distinct disclaimer rules for internet communications, defining what payment and authorization information must be included, and when that information is clear and conspicuous.

What are “Adapted Disclaimers,” “Technological Mechanisms,” and “Indicators”?   The FEC’s disclaimer rules have long exempted political communications that are too small (e.g., an ad printed on a pencil) or too impractical (e.g., sky writing) for a disclaimer.  The Commissioners agree a similar consideration applies to digital technology, and that for certain types of space-constrained communications, an abbreviated “adapted disclaimer” can be used.

But there is not yet consensus for when this abbreviated disclaimer could be used or what information would have to be included.   One alternative is for a bright line test that would permit an adapted disclaimer anytime a full disclaimer takes up 10% or more of the ad.  But should characters, pixels and seconds be the standard of measure, and is 10% too high or too low?  The FEC is curious to know what people think.  Nor has the FEC settled on exactly what the adapted disclaimer must include.  For example, in small space ads, could it be no more than a hashtag, or a well-known group’s initials, like DNC or NRA?

All the proposals envision that an adapted disclaimer would be accompanied by an “indicator” that would guide viewers to the full disclaimer with some form of “one-click” technology mechanism.  The FEC is considering things like hover-over mechanisms, pop-up screens, scrolling text, rotating panels, or hyperlinks to a landing page with a full disclaimer. One proposal envisions ads that are so space constrained that even the adapted disclaimer and indicators would take too much space, and exempts such ads from the regulations.

The Bottom Line.  After many failed attempts to update its internet regulations, the FEC Commissioners seem to have narrowed their differences to a point where it is possible to envision a final rule that brings the agency’s regulations into the 21st Century.  While pitfalls remain, we recommend paying close attention to the next phase of this rulemaking process.

© 2018 Covington & Burling LLP

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About this Author

Robert Lenhard, Election and political attorney, Covington
Partner

Robert Lenhard is a member of the firm’s Election & Political Law practice group and advises corporations, trade associations, not-for-profit organizations, and high-net-worth individuals on compliance with federal and state campaign finance, lobbying, and government ethics laws.

Mr. Lenhard routinely assists clients in establishing and operating federal and state PACs, compliance programs associated with campaign finance and pay-to-play laws; advises advocacy groups and their donors; conducts compliance trainings and audits of federal and state lobbying and...

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