Friends Don’t Let Friends Share “Fake News”: FTC Cannot Effectively Regulate “Fake News,” So It’s up to Us to Make News True(ish) Again

By Samuel E. Bordoni-Cowley (Rutgers Law Student)

Should we invite the Federal Trade Commission (FTC) to extend its reach in regulating online content in the name of stopping the spread of “fake news”?

Some scholars might say the marketplace of ideas should not be filtered, others that only public discourse will solve the issue, and others yet who would contend the marketplace of ideas occasionally fails and may need regulation to survive “fake news.” The FTC might even envision having for itself having an increased role in saving the online “truth,” but for now the Commission’s potential for regulating “fake news” is limited by its administrative scope and consumer-protection creed.

Assuming that “fake news” has a deleterious effect on the marketplace of ideas in the U.S., but knowing that the FTC has limited power to act, do we really need the FTC to expand its reach or perhaps another company to save us from “fake news”? I think not, because public discussion is a duty of the American citizen. Through participation in public discourse, speech functions to sow democratic principles and lead to the right outcomes and decisions.

So, why is this important?

The issue with “fake news” is generally in its hindrance of the truth, open public discourse, and promotion of irrationality. “Fake news” is now virtually synonymous with political news. However, the digital information people surround themselves with no longer necessarily relies on verifiable, empirical discourse, or sources—discourse on social media of all kinds works quickly, and has been reduced to Tweets and memes.

The differences between political and commercial speech are many, but it is the fact that commercial speech that is also political has become so ubiquitous through social media and other online platforms, which indicates that it might be changing the marketplace of ideas. It is for that reason that the FTC (and FCC) have been increasingly involved in the discussion around “fake news.”

The FTC can and should regulate counterfeit, fraudulent commercial speech. The Commission is ultimately toothless, by virtue of its scope as an agency, against the vast majority of what could be categorized as “fake news”—misinformation and falsehoods, particularly political in nature. But the commercial content that pushes such misinformation and falsehoods into the marketplace, that can sometimes be regulated by the FTC.

The FTC is broadly tasked with preventing business practices that are anticompetitive, deceptive, or unfair, and aims to enhance transparency. Its jurisdiction in this area is, however, limited to commercial speech: i.e., advertising or purely business communications.

Therefore, as several experts have concluded, the FTC must make the argument that “fake news” qualifies as commercial material. Much like the agency’s crackdown on the bogus health claims of the infamous acai-berry, the FTC could be able to regulate some of the more obvious fake political news, so long as the agency can claim that the product—i.e., “counterfeit” American news—was not merely political expression by an American.

The FTC regulates deceptively formatted advertisements (the acai-berry litigation), uses the phrase “fake news” in its policy statements, and enforces truth-in-advertising standards in a digital context. The Commission’s regulations on native advertising for businesses hold that an act or practice is deceptive if there is a material misrepresentation or omission likely to affect and mislead a consumer. Effectively, the FTC regulates deceptive ads that are commercial in nature but which mislead consumers.

The limited scope of the FTC’s reach is inhibiting.

Ultimately, the government can protect us, the people, from harm caused by misleading commercial content. But it cannot protect us from the “harm” in the sharing of, for example, political content that is seemingly legitimate but which spews hyperbole and fiction. The distinction is difficult to make, but the fact is that fake news is muddying the marketplace of ideas. To the degree that is caused or augmented by commercial speech that is misleading or false, the FTC might expand its enforcement efforts.

Regardless, though, Americans must fight misinformation in the same public forums we see the perceived misinformation being spread. If it is true that fake news altered the 2016 Presidential Election, for example, then we must address that with increased public discourse.

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