Attention Must Be Paid: Commercial Speech, User-Generated Ads, and the Challenge of Regulation

Abstract

This Article examines the dynamics that drive advertisers to push into new formats, and the law’s ability to regulate them. I argue that it will remain possible, and constitutional, to identify advertising and subject it to prohibitions on false and misleading claims, even for ads in unconventional formats. The article also addresses the ways in which regulators were caught off-guard by these new formats. In particular, Section 230 of the Communications Decency Act, which frees online service providers and users from liability for content generated by other users, poses some unanticipated barriers to regulating advertising. Yet despite section 230’s provisions, regulators retain flexibility in many situations. The Article considers the Federal Trade Commission’s (“FTC”) recent revisions of its guides on testimonials and endorsements. The guidelines apply to bloggers and others who receive substantial benefits from advertisers in return for their endorsements. After exploring the First Amendment challenges posed by such situations, including questions that go to the heart of the justification for regulating commercial speech, I contend that neither section 230 nor sound policy require the FTC to ignore these new forms of communicating with potential purchasers.

Keywords: first amendment, advertising, section 230

JEL Classification: K00, K23, K30, F13