Ripping Up the Astroturf: Regulating Deceptive Corporate Advertising Methods

AuthorMatthew J. Scott
PositionJ.D. Candidate, The University of Iowa College of Law, 2020; B.A. Political Science, Iowa State University, 2017
Pages431-461
431
Ripping Up the Astroturf:
Regulating Deceptive Corporate
Advertising Methods
Matthew J. Scott*
ABSTRACT: Astroturfing is a practice in which a corporate sponsor pays a
non-profit front group or public relations firm to disseminate a manufactured
message to create the illusion of grassroots advocacy in support of a particular
cause or for the company itself. This Note provides necessary background
information, examples, and methods by which a manufactured message is
dispersed to simultaneously mislead the public and lobby for support. This
Note goes on to present the problems with the current regulatory and legislative
frameworks, by referencing the Uniform Deceptive Trade Practice Act
(“UDTPA”), the Federal Trade Commission’s disclosure guidelines, and the
Securities and Exchange Commission’s mandatory disclosures for publicly
traded companies. In conclusion, this Note argues that the State governments
and Federal Agencies have the capability to update the laws and regulations
surrounding the astroturfing problem, and that the states should amend the
UDTPA to include astroturfing as a deceptive practice and require disclosure
of associations between companies and front groups that disseminate
manufactured messages. Alternatively, this Note argues that Congress should
pass a law requiring public disclosure of these associations to allow consumers
and investors alike to inform themselves of these practices and respond
accordingly—thus allowing the market to self-correct.
I. INTRODUCTION ............................................................................. 432
II.THE EVOLUTION OF GRASSROOTS AND THE EMERGENCE OF
ASTROTURFING ............................................................................. 433
A.CORPORATE AND CITIZEN INFLUENCE IN SOCIETY ..................... 434
B.GRASSROOTS ADVOCACY AND CHANGE THROUGHOUT
HISTORY ................................................................................. 434
C.ASTROTURFING AND CORPORATE MANIPULATION ..................... 436
1.Public Relations Firms and Front Groups ................... 436
*
J.D. Candidate, The University of Iowa College of Law, 2020; B.A. Political Science, Iowa
State University, 2017.
432 IOWA LAW REVIEW [Vol. 105:431
2.Methods of Astroturf Advocacy .................................... 438
D.ASTROTURFING IN HISTORY ..................................................... 441
E.POLICY CONSIDERATIONS AND PAST ATTEMPTS AT
REGULATION ........................................................................... 443
III. IMPEDING MARKET INFORMATION: ASTROTURFING AND
THE PUBLIC ................................................................................... 445
A.ASTROTURFINGS EFFECT ON CONSUMERS AND THE INABILITY
OF THE GOVERNMENT TO EFFECTIVELY ADDRESS IT ................... 446
B.ASTROTURFINGS EFFECT ON INVESTORS AND SHAREHOLDERS,
AND THE ROLE OF THE SEC ..................................................... 451
IV. REQUIRED DISCLOSURES: ARMING THE PUBLIC WITH
INFORMATION TO RIP UP THE ASTROTURF ................................... 454
A.MODERNIZING THE UNIFORM DECEPTIVE TRADE PRACTICES
ACT TO COMBAT ASTROTURFING ............................................. 455
B.MODERNIZING THE SEC’S DISCLOSURE POLICIES TO INFORM
INVESTORS OF ASTROTURFING PRACTICES IN COMPANIES .......... 457
C.DISCLOSURE AND MARKET SELF-REGULATION ........................... 459
V. CONCLUSION ................................................................................ 460
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
1. See generally Citizens United v. FEC, 558 U.S. 310 (2010) (granting corporations First
Amendment protections); Mimi Marziani, Growing Backlash Against ‘ Citizens United, NATL L.J.
(Jan. 23, 2012, 12:00 AM), https://www.law.com/nationallawjournal/almID/1202539063421
&Growing_backlash_against_Citizens _United [https://perma.cc/GWF6-H5HT].
2. Michael Beckel, What is Political ‘Dark Money’—And is it Bad?, CTR. FOR PUB. INTEGRITY
(Jan. 20, 2016), https://www.publicintegrity.org/2016/01/20/19156/what-political-dark-
money-and-it-bad [https://perma.cc/T4VH-YQL7].
3. See infra Section II.C.

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