Self-Proclaimed Publisher of Fake News Sites Loses Circuit Appeal

Fake news has been in the news a great deal recently, with some wondering how to address it. The recent decision by the U.S. Court of Appeals for the Second Circuit in Federal Trade Commission v. LeadClick Media, 838 F.3d 158 (2d Cir. 2016), may provide a way, at least in some instances. In this case, the Second Circuit upheld a challenge by the Federal Trade Commission (FTC) to certain kinds of fake news under the FTC Act, ruling that the FTC’s complaint had not run afoul of §230 of the Communications Decency Act (CDA).

Background

The case involved LeadClick Media, which operated an affiliate-marketing network to provide advertising in Internet commerce. LeadClick arranged for advertising for its merchant clients by connecting them to third-party publishers—affiliates—that advertised the merchant’s products. The affiliates advertised products in a variety of ways, including email marketing, banner ads, search engine placement, and creating advertising websites. LeadClick managed the affiliate network through tracking software that tracked the flow of traffic from each individual affiliate’s marketing website to the merchant’s website while remaining invisible to the consumer.