Academic journal article Iowa Law Review

Ripping Up the Astroturf: Regulating Deceptive Corporate Advertising Methods

Academic journal article Iowa Law Review

Ripping Up the Astroturf: Regulating Deceptive Corporate Advertising Methods

Article excerpt

I. Introduction

In recent years, the Supreme Court's decision to grant First Amendment speech protections has garnered significant attention.1 Citizens United v. Federal Election Commission opened the floodgates for "dark money" to flow through elections and campaigns in the United States.2 But an analogous issue-one that affects the average person more directly-has largely been ignored. Astroturfing is a practice in which corporate sponsor employs a public relations firm, or maintains a non-profit front group, to serve as its voice while the company remains anonymous.3 This front organization projects an image of public support for a social cause or for the business itself, when in reality, there is minimal public support. The hope is that the front group can convince enough people that widespread public support exists, and those people will then support the cause in the best interests of the hidden sponsor. Individuals continue to support companies that employ deceptive tactics to serve their interests, while citizens remain unaware.

This information deficit between individuals and the actual facts makes it difficult, if not impossible, for individuals to access the information necessary to make informed decisions. As individuals increasingly care about the social impact companies have on the world,4 they are often not provided with sufficient information about what their money actually supports. The Federal Trade Commission ("FTC") and the Securities and Exchange Commission ("SEC") were created to protect consumers and investors, respectively.5 Under the current regulatory regime, neither consumers nor investors are able to access adequate information to inform their monetary decisions.

This Note argues that these agencies, along with the states, have the tools available to combat astroturfing without banning corporate speech. Part II of this Note examines the history of grassroots movements, the adaptation of grassroots to the corporate astroturf context, and provides examples of the astroturf practices. Part III argues that the current regulations are not allencompassing enough to ban, or even limit astroturfing practices and thus, fail to protect consumers and investors alike. Lastly, Part IV proposes a solution for both consumers and shareholders. For consumers, the states should recognize the FTC's policies surrounding disclosure, and effectuate them by universally adopting and amending the Uniform Deceptive Trade Practices Act to cover astroturfing. For shareholders, the SEC should modernize its disclosure policies to reflect the growing influence of socially responsible investing. Alternatively, Congress should pass legislation regarding mandatory public disclosure for businesses generally, in effect allowing citizens to structure their behavior regarding practices that they might find objectionable.

II. The Evolution of Grassroots and the Emergence of Astroturfing

This Part outlines the definition of a grassroots movement, provides a historical example, and juxtaposes traditional grassroots movements with modern astroturfing practices. It then defines astroturfing, outlining methods by which corporations attempt to achieve success by using the practice, and provides a historical example of corporate astroturfing. The Part concludes by discussing past attempts to regulate the practice and the associated complications involved with regulation.

A. Corporate and Citizen Influence in Society

Over the last few decades, corporations have become powerhouses of influence.6 Similarly, citizen groups continue to play a major role in influencing other citizens and society as a whole.7 The difference between the two types of group influence is that corporations often face issues in advancing their interests due to a credibility barrier.8 It follows that corporations have an interest in emulating the power present in citizen groups to represent their own interests and to influence other citizens. …

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