LeadClick Loses Appeal in Circuit Court on Fake News

Fake news sites have been used to make millions of dollars for many people through ad revenue and other methods over the years. Since the recent presidential election, they have really had the spotlight shined on them, causing many people to wonder how they can be stopped. Well, it seems that there may actually be legal steps to be taken, at least in some cases.

The US Court of Appeals for the Second Circuit has just upheld a challenge made by the Federal Trade Commission (FTC). The case was the FTC v. LeadClick Media. The FTC brought charges under the FTC Act, and the court found that the complaint did not run afoul of specific sections in the Communications Decency Act.

LeadClick Media’s case involves their affiliate-marketing network, which provided advertising for a variety of eCommerce companies. They arranged advertising for their merchants on a variety of third party publisher’s sites. Most of these third party affiliates used common marketing techniques such as email marketing, banner ads, and more.

One company that hired LeadClick Media to market their products was Lean Spa, which sold products for weight loss, colon clenses, and other similar things. Some of the affiliates marketing these products were using fake news sites to try to generate traffic and sales. Their sites were designed to appear like they were genuine, which the FTC is attempting to show is a form of deceptive advertising.

The FTC sued LeanSpa as well as LeadCLick and others. The chargest against LeanSpa were settled fairly quickly, but LeadClick attempted to have the charges dismissed under §230 of the Communications Decency Act. The US District Court for the District of Connecticut denied LeadClick’s motion, and approved the summary judgement for the FTC.

LeadClick appealed some time ago, and now the appellate court has finally upheld the lower court’s decision. It is not 100% clear whether this case will finally be over or not, but at this point seems likely.

The bottom line here is that while the courts may not prevent all fake news sites, those that are blatantly deceptive are certainly going to be at risk.

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