$10,000 FCC Fine for Failure to Follow Contest Rules – On-Air Rules Were Right, But Online Rules Were Wrong
Having broadcast all of the material rules of a station’s contest was not enough to avoid a $10,000 fine for having misleading rules – when there were errors in the contest deadlines posted on a station’s website and in emails sent to contest participants. In an FCC Notice of Apparent Liability proposing a fine for a North Carolina FM station, the Commission also upped the fine from the usual $4000 base fine for a contest violation to $10,000, because the corporate parent of the licensee had been hit with two other fines for contest violations (one in 2009 and one almost two decades ago, in 1994) and as the company had very significant revenues in the past year.
The contest was called “Carolina Cuties”, where contestants posted pictures of their babies on the station’s website, the winning picture to be selected by a vote of station listeners. The station’s on-air announcements properly stated that the voting could continue through September 5 of last year, with the winner announced on September 6. But, on the website, during a week at the end of August, it was stated that the winner would be selected on September 4. This was later updated to say that the voting deadline was September 4, but correctly stating that the prize would be awarded on the 6th. An email to contestants also used the September 4 voting deadline date. Votes were in fact taken through September 5, as announced on the air. Nevertheless, as the website and emails stated that the voting deadline was September 4, the Commission determined that the station contest was not conducted “substantially as announced or advertised,” and proposed to levy the fine.
Obviously, this case goes beyond the cases that we have written about before (e.g. here and here), where the FCC issued fines for stations that failed to announce complete and accurate rules on the air. In one of those cases, the FCC said that, once a contest was promoted in any way on the air, even when the contest was conducted principally on the Internet, the material rules had to be broadcast on the air a sufficient number of times so that a reasonable listener would have a chance to hear them. In this case, that was done – but because the rules were not accurate on the website, the FCC found that the contest had not been conducted as “announced or advertised.” The Commission seems to be adopting a zero tolerance policy – even a typo in one place that the contest is promoted seems to lead to a fine - whether that inaccuate information is provided on the air or through some other medium makes no difference in trying to shield a station from liability. So take care to completely and accurately publicize your contests – no matter where you do so.
The case is also interesting in that the normal fine suggested by the FCC’s table of base fines - $4000 (see the FCC order setting base fines here) – was increased to $10,000 for two reasons. First, the FCC found that the company had already been put on notice of its obligations under the FCC’s contest rules as it had been fined before – even though one of the two fines that the FCC cited was in 1994. The fines were also at other stations in other parts of the country. Yet, as the stations that were fined in those cases were part of the CBS radio group, these two isolated fines over the last 18 years resulted in the fine being adjusted upward. The Commission also cites the billions of dollars in annual revenue of the CBS companies – suggesting that the fine had to be adjusted upward to be meaningful.
So big groups need even more careful – as the decision suggests that fines at one station in a group will be held against all other stations in the ownership group – and will still be considered significant when the children of the current employees are the ones doing the broadcasting.