WEBVTT - Bloomberg Law Brief: New Legislation for Online Ads (Audio)

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<v Speaker 1>Time now for the Bloomberg Law Report. It's brought to

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<v Speaker 1>see DR dot org. Let's get to the legal stories

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<v Speaker 1>we are watching this morning with Joan Donnegher and the

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<v Speaker 1>Bloomberg Washington Newsroom. Congress will finish the month with forward

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<v Speaker 1>momentum on tax reform after the Senate passed a budget

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<v Speaker 1>resolution that will allow the process to pass with a

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<v Speaker 1>simple majority. Next, it's the House is turned to act

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<v Speaker 1>how Subcommittee will examine rules for online political ads, including

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<v Speaker 1>a newly reopened federal Election Commission process that good strengthened

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<v Speaker 1>disclaimer requirements, and the i r S will focus on

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<v Speaker 1>reducing regulatory burdens and crafting rules to implement a new

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<v Speaker 1>process for auditing partnerships in the coming year. Bloomberg Law

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<v Speaker 1>everything you need, all on one legal research platform, include

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<v Speaker 1>guidance analysis and Bloomberg Market Intelligence. Find out more at

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<v Speaker 1>Bloomberg law dot com. Now another legal news Let's take

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<v Speaker 1>a look at a new bipartisan plan in the Senate

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<v Speaker 1>to put new requirements on political ads on social media.

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<v Speaker 1>For more in the story, Bloomberg lawhos stun Grosso speaks

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<v Speaker 1>with Bradley Smith, a professor at Capitol University Law School

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<v Speaker 1>and former chairman of the Federal Election Commission. Professor, why

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<v Speaker 1>have online political ads been exempt from the regulations that

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<v Speaker 1>paid TV, radio and print ads have been subjected to

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<v Speaker 1>for years? Well, this is a misconception. They're not actually

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<v Speaker 1>exempt from those requirements. Rather, there hasn't always been in

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<v Speaker 1>the Federal Ution Campaign Act and exemption where disclaimers are impractical,

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<v Speaker 1>where the items are too small, for example, applies to

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<v Speaker 1>bumper stickers, pens, buttons, all kinds of things like that,

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<v Speaker 1>and for many uh Internet ads, for many small you know,

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<v Speaker 1>twee eats and and Facebook type ads, it is simply

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<v Speaker 1>not practically put that disclaimer there. So that is the

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<v Speaker 1>basis on which these ads did not carry a disclaimer.

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<v Speaker 1>Let me ask you this Facebook did not get an

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<v Speaker 1>exemption from the disclaimer requirement in even as Google did.

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<v Speaker 1>So why hasn't Facebook been forced to comply or face

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<v Speaker 1>some kind of penalties. Well, at the time, one of

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<v Speaker 1>the questions has been whether or not this exemption for

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<v Speaker 1>what's often called the small items exemption should apply to

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<v Speaker 1>various Internet type advertising and digital platforms, and that has

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<v Speaker 1>varied with the question of you know, what is the

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<v Speaker 1>cost how practical is it to do? So what you

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<v Speaker 1>had was a series of advisory opinion request where companies

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<v Speaker 1>were asking, you know, in specific situations, do we need

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<v Speaker 1>a disclaimer on this, that or the other. So there

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<v Speaker 1>are different situations each time. In Google's case, the Commission

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<v Speaker 1>voted that no disclaimer was necessary. In the Facebook case,

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<v Speaker 1>the Commission ended up splitting three to three, which means

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<v Speaker 1>essentially they didn't give Facebook and opinion one way or

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<v Speaker 1>the other. But it's a practical matter. Since you need

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<v Speaker 1>four commissioners to vote for an enforcement action, uh, and

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<v Speaker 1>you have three commissioners say no, you don't need a disclaimer,

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<v Speaker 1>it was logical for Facebook to assume that they weren't

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<v Speaker 1>going to have to go through that putting a disclaimer

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<v Speaker 1>on all those ads are turning away as where that

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<v Speaker 1>was not in their estimation practical. And as Bradley Smith,

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<v Speaker 1>the professor at Capital University Law School, speaking with the

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<v Speaker 1>Bloomberg's to doing Grosso, you can listen to Bloomberg Law

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<v Speaker 1>weekdays at one pm Wall Street Time here on Bloomberg Radio,

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<v Speaker 1>and find more illegal news at Bloomberg law dot com.

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<v Speaker 1>Attorneys will find exceptional legal research and business development tools

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<v Speaker 1>there as well. Visit Bloomberg law dot com for more information.