Last week the New York State Board of Elections enacted new rules governing the purchase of political time by Independent Expenditure Committees. These new rules were implemented as part of the NY Democracy Protection Act, which was designed to limit foreign influence in our elections. They involve one small subset of political advertising – advertising purchased by “third party” Independent Expenditure Committees (IEC). While the rules focus primarily on digital platforms, which include websites, social media sites apps, etc., there are requirements for traditional broadcast stations.
- Station and website liability – Through several exemptions local broadcast stations as well as their local digital platforms are essentially exempt from any penalties for content that is broadcast or streamed. However there is an obligation to ask an IEC for its NY Board of Election Registration Form at the time the political advertisement is purchased.
- Digital Sales Liability – Your digital sales force may incur liability if they sell political digital advertising to an IEC and they do not obtain a copy of the IEC’s NY Board of Elections Registration form.
These rules were adopted as “emergency regulations.” This means they have gone into effect and will apply to the upcoming 2018 elections. It also means that they may be subject to changes and clarifications.
The following Q & A outlines the major aspects of the rules.
- Stations selling political time to an Independent Expenditure Committees (IEC) must ask for a copy of its NY Board of Elections registration form:
1.1 Traditional Broadcasts
When selling political advertising to an Independent Expenditure Committee, a broadcast station shall require the IEC to file its registration form with the station at the time of purchase. The IEC is required to notify the station that the committee purchasing the ad is an IEC. The IEC must provide the station with a copy of its registration form at the time of purchase. Thus while you must ask for the form, the obligation is on the IEC to provide you with the registration form. There is no obligation on the part of the station to investigate the IEC. The stations only obligation is to ask for the form and retain it your files.
A copy of and IEC registration form may be found HERE.
Note: While there is an obligation to ask for the IEC’s registration form, the penalty provisions apply only to advertising for on-line platforms not political advertisements that are broadcast on traditional broadcast outlets.
1.2 On-line Platforms
There is the same obligation to ask for a copy of the IEC’s NY Board of elections registration form at the time the advertising is sold. However, the failure to obtain a copy of an IEC’s registration could result in significant penalties.
1.3 How long do I keep the forms?
There are no document retention requirements in the regulations. You would be required to produce the registration form if asked by the NY Bard of Elections. Until this is clarified, you should keep the forms for at least one election cycle.
2. Political advertisements from IEC’s must contain sponsorship identification tag
2.1 Traditional Broadcasting:
Political advertisements purchased by IEC’s must contain sponsorship ID tags. Of course, FCC rules already mandate this for all broadcast ads, so there is nothing new here.
2.2 On line Platforms
The FCC’s sponsorship identification rules do not apply to on-line platforms such as Internet websites and social media platforms. The new regulations will require sponsorship ID tags on political advertisements purchased by an IEC that appear on your stations on line digital platforms.
3. What is an Independent Expenditure Committee (IEC):
An IEC is a third party committee that seeks to purchase time for a particular candidate or ballot proposition. For example, committees with titles such as “Citizens for a Better NY” or the “Upstate Victory Fund” are likely to be and IEC. An IEC is not your traditional candidate campaign committee.
An IEC is required by law to register with the NY State Board of Elections. They must complete an extensive registration form. The Board of Elections is in the process of developing a separate web page and it will be operational soon.
4. Is there a list of IEC’s
The Board of Elections is developing a website to list all relevant IEC data. A list of all current IECs that have registered with the NY State Board of Elections can be found HERE.
5. Do the new rules apply to ads purchased by traditional candidate committees?
The rules do not apply to political ads purchased by a typical candidate’s political committee, or a party’s political committee (e.g., Democrat, Republican, Working Family etc.) Thus, you do not have to ask a traditional committee for a Board of Elections registration form.
6. No foreign IECs:
Foreign governments, foreign nationals or their agents may not register as an Independent Expenditure Committee
7. Is my station’s website or social media platform subject to the new rules?
The rules apply only to on-line platforms, apps and social media platforms that receive 70 million or more unique U.S. visitors per month. This number is based on each individual web site domain name or app. It does not aggregate all the platforms owned by a single entity. This standard captures the largest national websites including Google, Twitter and Facebook. Based on data we have received, there are no broadcast station websites or social media platforms in New York State that trigger this standard. Thus your websites and social media platforms will be exempt from the rules. In addition, with the exception of perhaps FoxNews.com, no national broadcast or broadcast network on line platforms currently meet this requirement.
This exemption is important. Due to programmatic sales, you may not know which advertisements are appearing on your web sites or social media platforms. Even if a non-conforming political advertisement from and IEC without a sponsorship ID tag appears on your website, you will not be liable because you do not meet the “70 million standard.”
8. Do My Digital Sales People Have to Ask for and IEC Registration From?
For now, the short answer is probably yes. This is especially true, if you are part of a large media company, and your account executives are selling digital advertisements on your own website, your company’s national platform or placing ads programmatically. Frankly, this gets confusing and needs clarification.
The new rules are intended to apply to a variety of “Third Party Vendor” digital ad agencies, and ad exchanges. The regulations require those selling digital advertising to ask for a copy of an IEC registration form. Similarly an IEC is required to provide a copy of its NY Board of Elections registration form at the time of purchase. All digital ads must have a sponsorship ID tag.
There is an exception. The new regulations apply only to entities that – in aggregate – place digital ads that are visited by more than 30 million unique U.S. visitors per month. This is not easily determined. The intent was to distinguish small digital agencies from large digital agencies and ad exchanges. However we are not sure this does not unintentionally catch smaller entities, including broadcast sales teams.
Even small stations that provide their clients with programmatic sales, or are part of a large media company that owns a nationwide digital platform could trigger the “30 million standard.” Thus, even if your station’s on-line platform is exempt; there could be liability for your sales force if they are selling political digital ads to and IEC that appear on other platforms.
For now, we suggest that if your station is selling digital political advertising to an Independent Expenditure Committee, then the account executive should ask for a copy of its New York Board of Elections Registration Form.
9. What are the penalties?
9.1 Traditional Broadcast:
While there is an obligation to ask for the IEC registration form, there are no penalties for broadcasting IEC’s spots under the new NY Law. The penalties only apply to on-line platforms.
9.2 On-Line Platforms and Digital Sales
The penalty is $1000 per violation. This could become significant if a digital ad does not contain a sponsorship tag and appears multiple times. It is important to remember however, that because your station’s on-line platform does not meet the 70 million U.S. visits per month standard, you website and online platforms are essentially exempt.
There may be liability for your digital sales. If your digital sales person does not ask for the registration form, and the IEC’s political ad appears on multiple platforms, there could be significant liability.
As noted above, the Board of Elections may clarify or amend these rules. A copy of the new regulations may be found HERE.
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